Europe's economy shrinks in first quarter as US rolls ahead
Figures show Europe's economy contracted in the first three months of the year
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Europe s economy shrank 0.6% in the first three months of the year as slow vaccine rollouts and extended lockdowns delayed a hoped-for recovery and underlined how the region is lagging other major economies in rebounding from the coronavirus pandemic.
The fall in output was smaller than the 1% contraction expected by economists but still far short of the rebound underway in the United States and China two other pillars of the global economy.
U.S. growth figures announced Thursday showed the U.S. grew 1.6% during the first quarter, with business supported by strong consumer demand. On an annualized basis, the U.S. grew 6.4%.
The second straight quarter of falling output in Europe, following contraction in the fourth quarter of 2021, confirms Europe’s double-dip pandemic recession after a rebound in growth in the third quarter. Two quarters of falling output is one definition of a recession.
Germany, the continent's largest economy, shrank by a larger than expected 1.7% as the manufacturing sector was hit by disruption of parts supplies on top of the hit to services and travel from pandemic-related restrictions on activity.
Economists said they expected an upturn in the coming weeks as vaccinations accelerate.
One factor in Europe is a slow vaccine rollout and prolonged lockdowns. Another is less government support for the economy. U.S. President Joe Biden s $1.9 billion relief package, coupled with spending from earlier support efforts, will mean additional cash support of about 11-12% of annual economic output for this year, according to economists at UniCredit bank. By contrast, the European fiscal stimulus amounts to about 6% of gross domestic product.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.