Q1 Economic Activity for the US and Europe
Over the course of the first fiscal quarter of 2021, Europe as a whole watched its economy shrink by 0.6%. While this is actually a marginal win for the region, as many economists predicted that business across the region would actually shrink by 1%, Europe is still a ways behind economic powerhouses like the US and China. This is largely due to the lag in proper vaccine distribution to fight against the COVID-19 pandemic. While the public waits, many countries in Europe have continued to sacrifice economic gains by maintaining strict public health and safety restrictions in the meantime.
The drop was most notable in European economic powerhouse Germany, whose economy declined by 1.7%. On top of pandemic-related restrictions, the country also fell victim to disruptions in the global supply chain, hampering the usually robust manufacturing industry. Europe’s economy is expected to bounce back in the next quarter of 2021, with reopenings playing a crucial role in several countries that rely heavily on tourism for business.
The US, on the other hand, saw massive economic gains in the Q1 2021 fiscal year. In fact, the US experienced a whopping 6.4% growth during the quarter. With a massive push in vaccination efforts paying off in a major way, most states have lifted at least a portion of their pandemic business and activity restrictions. As a result, citizens have been returning to public spaces such as restaurants, theme parks, and bars.
Outside of vaccine rollout, the $1.9 trillion stimulus package passed by the US government earlier in the year served as a major catalyst for economic activity. With federal grants supporting struggling small businesses and individual checks being delivered to citizens, spending increased.
Future Economy — Expectations for Both
While the two regions currently stand in stark contrast when it comes to business, Europe is set to join the US and resume its economic growth during the following few months. With reopenings slowly creeping across the continent, economists are predicting a 4.4% growth from Europe over the rest of the year. This holds especially true if Europe can further reduce its current unemployment rate of 8.1%.
The US looks to continue forward on its ongoing path of economic recovery and growth following a serious collapse at the peak of the pandemic. In fact, economists predict that 2021 could be the largest year of economic growth for the country since 1984, suggesting historic business momentum.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.