JC Rothchild General - EU Economic Outlook Brightens

Tokyo, Japan, July 23, 2021 --(PR.com)-- Over the past ten years, Europe’s economy has exhibited weak economic growth, employed negative interest rates to avoid a deflationary spiral, and been confronted with challenges within a socio-political sense that have set a threshold on stocks – which have already been soft in relation to the global market where countries are pushing tech and other dynamic assets. However, the recovery of the European economy offers new prospects amidst a transformation in policy.

Significant vaccine supply has catapulted some EU countries ahead of the US in initial vaccine inoculations. This creates the possibility of more lenient restrictions for the remainder of the year which will likely bring about a hike in hiring and consumer spending – similar to what the US is currently experiencing. JC Rothchild General economists anticipate higher GDP gains in 2022 versus 2021 for the Eurozone, in contrast to over economies in which the consensus is that growth will begin to normalize following an initial spike.

The US is considered to be at the peak of their growth potential following the crisis and is also out of options when it comes to Fed policy, with economists at JC Rothchild General anticipating a deceleration in bond purchases and an interest rate hike in the near term given the current inflationary pressures. In contrast, Europe is considered to only just be entering their growth potential and their fiscal and monetary policy is far from in the red, unlike the US. In addition, Europe’s $950 billion recovery stimulus fund is yet to be distributed, whilst the majority of US recovery funds have already changed hands. This support is likely to generate even greater economic returns as the fund is targeted at alternative energy, digitization and infrastructure developments. Economists at JC Rothchild General have marked European stocks a hot commodity, especially given that they are currently trading at a discount.