Euro Area Economic Growth to Return to Pre-COVID Levels in Q1 2022 – ECB

Source: European Central Bank

Economic activity in the Euro area could return to pre-COVID levels in the first quarter of 2022, but erasing the damages could take longer.

• The economy is predicted to post strong growth in the third quarter after the rebound in the second quarter.
• Optimism is driven by the vaccination rollout and the easing of lockdown restrictions in most Euro area countries.
• Manufacturing is poised to report strong growth even with supply issues, services will bounce back due as economies reopen.
• The ECB warned that there may be a “long way to go” before the damage to the economy caused by COVID-19 is offset.
• A decline was reported in the number of individuals in job retention schemes, but still remains high.
• Employment remains 3.3 million people less than the levels seen before the pandemic, especially among the youth and lower-skilled.
• The ECB believes policy support remains essential, and an “ambitious” and coordinated fiscal policy should complement monetary policy.