Research Briefing | Jun 9, 2021

Eurozone | As the recovery takes off, post-Covid debates begin

Ipad Frame_Eurozone-As-the-recovery-takes-off-post-Covid-debates-begin

The eurozone is heading into a strong economic rebound this month, driven by a services sector boom as restrictions are dialled back. Services PMIs skyrocketed in May to multi-year highs in all four of the eurozone’s largest economies. Meanwhile, the manufacturing sector remains healthy.

What you will learn:

  • Headline inflation exceeded 2% in May for the first time in years, mainly due to rising energy prices, although core inflation remained below 1%.
  • Price swings are likely in the next few months as economies reopen, and the current surge in food and industrial prices will eventually passthrough to CPI inflation.
  • The EC confirmed fiscal rules will remain suspended until the end of 2022, but it’s not clear what fiscal framework will prevail after that.

Back to Resource Hub

Related Services

Seoul, South Korea

Post

BoK’s monetary policy to tighten even as hiking cycle ends

Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.

Find Out More

Post

China: Emerging green shoots in Spring, but not out of the woods

We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).

Find Out More