Europe’s Recession Contrasts Economic Fortunes of U.S. Expansion

The German economy diminished by a sharp 1.7 percent from January through March, but that was better than anticipated, prompting some economists to forecast a speedier recovery in Europe’s largest economy.

Italy and Spain slipped by much smaller magnitudes — 0.4 percent in Italy and 0.5 percent in Spain. France grew by a modest 0.4 percent, though its prospects face a fresh challenge in the form of new pandemic restrictions imposed in April by the government.

The initial lockdowns last year punished Europe’s economies, bringing large swaths of commercial life to a halt. But the current restrictions are calibrated to reflect improved understanding of how the virus spreads. Rather than closing their doors altogether, restaurants in some countries are serving meals on patios and dispensing takeout orders. Roofers, carpenters and other skilled trades have resumed work, as long as they can stay outside.

“We have sort of learned to live with the pandemic,” said Dhaval Joshi, chief strategist at BCA Research in London. “We are adapting to it.”

Vaccination rates are increasing throughout Europe, a trend likely to be advanced by the European Union’s recent deal to secure doses from Pfizer.

Most economists and the European Central Bank expect the eurozone to expand rapidly over the rest of 2021, yielding growth of more than 4 percent for the full year.

Still, even in the most hopeful scenario, Europe’s recovery is running several months behind the United States, a reflection of their differing approaches to economic trauma.

Article source: https://www.nytimes.com/2021/04/30/business/europe-gdp.html