European growth well supported by Spain and Ireland

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The European economy was almost stagnant in 2023, but since the turn of the year, it has grown nicely. In the second quarter of the year, the total economy of the EU countries grew by 0.3 percent. This is shown by a preliminary report from the EU’s statistics office, Eurostat, on Tuesday. The highest growth was in Ireland, Lithuania, and Spain, while Latvia and Sweden ended up as the losers.

Although they are not tremendously high growth rates, it is positive after a time when the economy has mostly been treading water for more than a year. This is what Jeppe Juul Borre, who is chief economist at Arbejdernes Landsbank, writes in a comment. “At the same time, inflation is on its way down, employment is rising, and confidence in the European economy has generally increased in 2024. So although a booming growth is still waiting to happen, things are starting to look a little brighter,” he says.

One of the biggest stories in today’s report is that the German economy took a small step back. This is something that Allan Sørensen, chief economist at Dansk Industri, has particularly noted. “Europe’s largest economy has major challenges. The German economy has shrunk slightly over the past year,” he writes in a comment.

However, like Jeppe Juul Borre, he is hopeful when looking ahead. “I expect that growth will pick up in the coming quarters,” writes Allan Sørensen. “Inflation has come down, purchasing power is increasing, and interest rates are slowly coming down. This is the fuel that will accelerate the economy.”

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