Southern European economies roar back to business

Economies in Europe’s south are showing massive growth rates, covering ground lost during the pandemic.

Data indicates that the pace of GDP expansion for the whole of 2021 will be revised higher for a number of countries in the region as tourism sectors recover amidst easing travel restrictions.

The strong figures also indicate that more room will be created for tax cuts, in countries such as Greece and Italy, further boosting consumption in those economies.

Spain has led the charge, with its economy expanding by an annual pace of 19.8 percent in the second quarter of the year, followed by Italy (17.3%), Greece (16.2%), Portugal (15.5%) and Cyprus (12.9%). Turkey’s economy also rebounded by a powerful 21.7% in the same period.

Across the EU, growth averaged out at a rate of 13.8 percent.

The latest figures were released in Athens yesterday. Its economy beat expectations on the back of stronger consumer spending and higher investment activity.

Economists point out that second quarter's GDP performance did not get a major push from tourism, which is expected to have an impact on third quarter figures.

The strong numbers prompted credit rating agency DBRS on Wednesday to revise higher its growth estimate for the Greek economy to 5.2 percent. Previously, the agency had a two-scenario forecast for Greece with a growth projection ranging between 3 to 5 percent.

In Italy, the Organization for Economic Cooperation and Development (OECD) said that the Italian economy will expand by 5.9 percent in 2021, and return to the levels registered in 2019 by the first half of next year, while in Spain the economy looks on track to meet the government forecast for growth of 6.5 percent for the year.