The euro area has escaped the downward pull for the time being.
While the economy in China and the USA shrank in the second quarter, the gross domestic product (GDP) in the monetary union surprisingly grew significantly - by 0.7 percent after 0.5 percent at the beginning of the year.
The service sector in particular contributed to the upswing.
The southern European countries in particular have benefited from the fact that more people are being drawn abroad again after the end of the corona restrictions.
In Italy and Spain, the economy grew by 1 and 1.1 percent respectively.
Svea Junge
Editor in Business.
Follow I follow
“The euro zone comes out of the second quarter with a bit of tailwind and the hunt to catch up in tourism and the hospitality industry is likely to continue into early autumn,” says Allianz European economist Katharina Utermöhl.
However, it is uncertain how long the overall economy can be kept afloat.
A setback in private consumption is to be expected in the fourth quarter at the latest, because inflation is eroding the consumer base, she warns.
In fact, inflation is already eating into consumers' purchasing power.
Retail sales fell surprisingly sharply in June.
This shows that when it comes to goods such as groceries or clothing, consumers pay more attention to money – even if they still spend money on leisure activities.
Economists disagree on how euro inflation, which reached a new high of 8.9 percent in July, will develop over the next few months.
While Utermöhl expects it to peak in September and then lose some momentum again, Commerzbank chief economist Jörg Krämer expects a further increase: "There is still a lot of price pressure in the pipeline," he says.
The expiry of the 9-euro ticket alone increases inflation in Germany by 0.7 percentage points.
In addition, there will be the gas levy in October.
"In the fourth quarter, the inflation rate is likely to rise to over 9 percent," is his forecast.
Consumer sentiment is historically bad
Krämer does not expect that the savings from the corona pandemic – which, according to a survey published by the European Central Bank on Monday, were only made up by one in five households anyway – will be released in the next few months and thus support consumption.
"To do this, consumers would not only have to reduce their savings rate to the long-term average of around 11 percent, but stay below it for a longer period of time.
According to polls, they don't intend to do that," he says.
Historically poor consumer sentiment also suggests that consumers are keeping their money together.
According to the latest results of the Economic Assessment Indicator (ESI) surveyed by the EU Commission, households assessed their future financial situation as badly as never before.
Intent to make major purchases fell to its lowest level since April 2020.