Southern Europe to outperform this year

The expectation of a strong recovery in the tourism sector, coupled with the divergence between resilient services activity and a weaker industrial sector, means we expect Southern European economies will generally outperform the rest of the continent this year. Contrary to conventional wisdom, the outperformance of peripheral economies does not reflect a catch-up from the Covid crisis, with Spain being the only country still lagging in its recovery from the pandemic shock.

What you will learn:

• Traditional tourism powerhouses such as Spain, Greece and Portugal will be among the fastest growing eurozone economies this year based on our forecasts.
• Despite its large tourism sector, Italy’s outlook is not as positive, as the country is the second largest industrial economy on the continent and will therefore be more affected by the headwinds hitting the sector.
• The overperformance of Southern Europe is important as it comes at a time when investors are increasingly concerned about the rise in peripheral bond yields.