Research Briefing | Sep 13, 2021

Eurozone | Europe’s consumer boom faces several challenges

Ipad Frame-Europes-consumer-boom-faces-several-challenges

We expect above-average growth in the eurozone over the coming quarters given the ample pent-up demand in the aftermath of the crisis. In the short term, economies will still benefit from reopening tailwinds but will be facing several challenges. We see euro area GDP returning to pre-pandemic levels in Q4 2021.

What you will learn:

  • Consumer spending will remain the main engine of growth given the strong recovery in employment and incomes as well as the massive stock of savings accumulated by households during the crisis.
  • Supply-side issues represent the other main recovery headwind. With global supply-chain problems lingering longer than expected, the industrial sector is unlikely to contribute meaningfully to the recovery in the second half of the year.
  • Despite the problems plaguing the industrial sector, we expect a strong cycle for capital spending.
Back to Resource Hub

Related Services

Post

The UK’s fiscal adjustment is at risk of failure

The UK is planning one of the largest fiscal consolidations of any advanced economy over the next two years. We expect it to result in much weaker GDP growth than the Office for Budget Responsibility forecasts and think the government's balance sheet is still likely to deteriorate.

Find Out More

Post

Autos and machineries in Japan are most vulnerable to US tariffs

Our analysis of industry and trade structure between the US and Japan reveals the auto and non-electrical machinery sectors are most vulnerable to tariffs by the US. For both sectors, the US accounts for a sizeable share of total exports as well as gross output, and particularly so for auto.

Find Out More