FRANKFURT, Germany (AP) – The European economy slowed noticeably at the end of last year as surging COVID-19 cases driven by the Omicron variant piled on top of supply shortages and rising energy prices that dented consumer purchasing power. The result: An economic winter of discontent that may not lift until later this year.
Much of the slowdown came in Germany, Europe’s largest economy, where difficulty getting needed parts held back its export-heavy manufacturing economy. France, Spain and Italy showed stronger growth.
In the 19 countries that use the euro, growth in the last three months of 2021 came in at 0.3 per cent, the European Union’s statistics agency said yesterday. That compared with growth of 2.2 per cent in the July-September quarter.
For the year, it was 5.2 per cent, underlining how Europe’s economic recovery from the pandemic has moved at a somewhat slower pace than the rebound in the United States (US), where 2021 growth was 5.7 per cent.
US growth was boosted by what economists said was a comparatively larger share of federal stimulus spending than what took place in Europe.
A major reason for Europe’s slowdown was spiking COVID-19 cases that led to new and shifting restrictions and deterred cautious consumers from spending money on restaurants, hotels and entertainment. That comes on top of clogged supply chains, which are leaving the eurozone’s export-oriented manufacturing sector unable to fill orders, and higher prices for oil, natural gas and electricity, which are weighing on businesses and consumers.