Growth slows at end of 2021 in 19 countries that use euro

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 consumer prices. The result: An economic winter of discontent that may not lift until later this year.

Growth in the last three months of 2021 came in at 0.3% for the 19 countries that use the euro, the European Union's statistics agency said Monday. That was a slowdown from 2.2% in the July-September quarter.

For the year, growth came in at 5.2%, underlining that Europe’s economic recovery from the pandemic has moved somewhat slower than the rebound in the United States, where 2021 growth was 5.7% compared with the year before. U.S. growth was boosted by what economists say 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 at 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.

And the friction in Europe’s gears isn’t over yet. Growth “might weaken further” in the current quarter, according to economists at UniCredit bank.

Germany, the largest eurozone economy, shrank 0.7% in the fourth quarter and would slide into a shallow recession if growth is negative again in the first three months of this year. Two straight quarters of declining output is one definition of a recession.

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