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Europe’s economy faces recession

Europe’s economy faces recession

According to analysts at The New York Times, the eurozone economy contracted by 0.6% in the first quarter of 2021 which is a clear sign of a recession. The economic downturn has been caused by the COVID-19 restrictions in some European countries and the lack of stimulus measures. Today, the US economy has outpaced the European one thanks to “substantial public expenditures” and a rapid pace of vaccination, analysts at The New York Times note. Currently, 19 nations of the euro area have faced a so-called double-dip recession that “reflects far less aggressive stimulus spending and a botched effort to secure vaccines.” Yet, there are some signs of improvement in the EU. The spread of the coronavirus in Germany and France has slowed down, while factories have revived production. Thus, the German economy shrank by 1.7% from January through March whereas GDP of Italy and Spain contracted by only 0.4% and 0.5% respectively. The economy of France grew by a modest 0.4% and its prospects are rather optimistic. Most economists and the ECB expect the eurozone to expand rapidly over the second half of 2021, producing growth of more than 4% on a yearly basis.  


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