Europe’s Economy Continues to Lag Behind the U.S. and China
February 4, 2021
A persistently high infection rate, prolonged shutdowns, and slow vaccine rollout have held the European economy back, even as the U.S. and China are rebounding. A recent spate of data highlights the growing gap between Europe and other advanced economies.
The eurozone’s gross domestic product contracted by 0.7% in the last quarter of 2020, resulting in a total annual decline of 6.8% for 2020, according to the European Union’s statistics agency. That compares to a 3.5% decline in the U.S. and 2.3% growth in China.
Like the rest of the world, the trajectory of Europe’s economy will be determined by the virus, specifically how quickly widespread vaccination can be achieved, allowing normal business to resume. Unfortunately, the region’s vaccine rollout is lagging. The EU countries have vaccinated just 3% of their populations, compared to 14% in the U.K. and 9% in the U.S., according to OurWorldInData.
The International Monetary Fund expects the eurozone economy to be 3.3% smaller at the end of this year than at the start of 2020. By comparison, the U.S. economy is expected to be 1.5% larger.