Thu. Jun 13th, 2024

France and Germany’s economies hit by eurozone slump as UK bounces back

Tyler Mitchell By Tyler Mitchell May29,2024

Economies in the eurozone are growing at half the pace of the UK’s, according to figures published by the European Union’s own statistics division – with Germany and France doing even worse.

And one UK-based economist has warned countries in 19-strong monetary union to brace themselves for a “muted” recovery – in contrast to Britain, which bounced back out of recession this week.

The Eurostat data indicates GDP across the region grew by 0.3 percent in the first quarter of 2024 – half the UK’s figure on 0.6 percent.

Furthermore, Capital Economics’s Andrew Kenningham warned Brussels the figures did not offer a true reflection of the position.

He said: “The increase in the first quarter was partly due to a weather-related rebound in construction activity which is unlikely to be repeated.”

Consequently, the recovery would be “quite muted”, Mr Kennington explained.

Perhaps most strikingly, the bloc’s two major economies – France and Germany, led by Emmanuel Macron and Olaf Scholz respectively – recorded the slowest growth, just 0.2 percent.

Germany has therefore failed to claw back all the ground lost in the last quarter of last year, when its economy contracted by 0.5 percent.

Carsten Brzeski, economist at ING, said: “Despite a generally strong labour market there is collective concern about a potential loss of prosperity and declining competitiveness in Germany.”

He added: “German employment might be at a record high level, but the number of people in part-time employment has also risen to historic highs recently.”

At the end of 2019, 45 million Germans had a job, with 11 million working in part-time jobs, Mr Brzeski pointed out.

Four years later, after the pandemic, total employment stood at 46 million, but the number of people working in part-time jobs had increased to nearly 12 million, he added.

He said: “As a result, the total number of hours worked was down to 61.8 billion in 2023, compared with 62.3 billion in 2019.”

Speaking to Sky News earlier this week after the release of the better-than-expected ONS figures, Prime Minister Rishi Sunak hailed them as proof that the UK economy had “turned a corner” eight years after Brexit.

He added: “I am pleased that while there’s more work to do, today’s figures show that the economy now has real momentum, and I’m confident that with time, people will start to feel the benefits of that.

“We’ve had multiple months now where wages are rising, energy bills have fallen, mortgage rates are down and taxes are being cut… I’m pleased with the progress that we’re making.

“I am confident the economy is getting healthier every week.”

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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One thought on “France and Germany’s economies hit by eurozone slump as UK bounces back”
  1. How will the economic struggles of France and Germany impact the overall stability of the eurozone in the long term?

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