BRUSSELS- The euro zone economy grew faster than expected in the second quarter, pulling out of a pandemic-induced recession, while the easing of coronavirus curbs also helped inflation shoot past the European Central Bank’s 2 percent target in July.
The European Union’s statistics office Eurostat said on Friday that its initial estimate showed gross domestic product (GDP) in the 19 countries that use the euro had expanded 2.0 percent in April-June from the previous quarter.
Compared to the same period a year earlier, when lockdowns to slow the spread of the coronavirus brought economic activity close to a standstill, GDP jumped 13.7 percent.
But unlike the US and Chinese economies, which have pulled above their pre-pandemic peaks, the euro zone economy remains some 3 percent smaller than it was at the end of 2019.
Eurostat also said euro zone inflation accelerated to 2.2 percent in July from 1.9 percent in June – the highest rate since October 2018 and above the 2.0 percent mean expectation of economists.
Economic growth also surpassed a Reuters poll forecast of 1.5 percent for the April-June quarter and a 13.2 percent annual increase.
Among the outperformers were the euro zone’s third and fourth largest economies, Italy and Spain, with quarterly growth respectively of 2.7 percent and 2.8 percent. Portugal’s tourism-heavy economy expanded by 4.9 percent.
