Harry Wilmerding
European economic growth outpaced the U.S. and China as COVID-19 restrictions eased and vaccination rates increased, but supply chain disruptions and inflating prices will hold back expansion in the near future, The Wall Street Journal reported Friday.
Gross domestic product in the eurozone increased at a seasonally adjusted annualized rate of 9.1% in the quarter ending in September, according to the WSJ. In comparison, the U.S. economy grew at a 2% rate and China grew at just 1%.
Economists believe that while eurozone growth is significantly outpacing the U.S., its growth is expected to slow due to worsening supply chain bottlenecks that limit economic expansion into other countries, the WSJ reported.
The eurozone depends mainly on international trade compared to the U.S., where services represent a large part of the economy, the WSJ reported. This has caused eurozone production to slow as companies struggle to find manufacturing supplies.
The eurozone saw a recent spike in consumption after the region loosened COVID-19 restrictions, citizens returned to restaurants and travel picked up, according to the WSJ. Some European governments have begun reinstating COVID-19 rules as the colder weather spurs more COVID-19 cases.
“We have to be aware of the risks we could face over the next month,” French Finance Minister Bruno Le Maire said at the G20 meeting in Rome, the WSJ reported.
“The first one is bottlenecks, and the risk of shortages of raw materials, of semiconductors and also on the labor market. I think this is the key risk for the next months for the economic recovery,” Bruno added.
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