The largest economies predict that they will regain their forecast level by the end of the year

The world’s largest economies on both sides of the Atlantic have a good chance of recovering lost land caused by the coronavirus pandemic at the end of the year, much faster than economists feared before.

Economists have revised their U.S. and eurozone economic performance forecasts after this week’s data showed that both economies are more resilient than expected.

U.S. household spending has begun show effects Joe Biden’s $ 1.9 million stimulus and eurozone first quarter contraction data released on Friday showed that the latest wave of Covid-19 was smaller than economists expected. Block progress spread of vaccines it is expected that it will boost consumer spending in the coming months as service sector businesses reopen.

As a result, the two economies are more likely to recover from pre-pandemic production levels before the end of the year – a significant improvement April NDF forecasts, which suggested that this would not happen until 2022.

After the data was released, James Knightley, chief economist at ING Bank, said: “Wowzers, the US economy is hot.” Citiko Giada Giani said that European indicators were “much stronger than we expected in April”.

U.S. growth figures for the first quarter of Thursday saw economic output drop 0.9% below the previous pandemic peak and Washington’s stimulus controls boosted household incomes far more than spending, leaving significant resources unspent.

The picture of the eurozone’s poor economy will change rapidly

Economists expect a rise in consumption in the second quarter to help the U.S. recover the remaining land lost in the pandemic by the end of June.

The U.S. food service, transportation and leisure businesses are reopening, and Ian Shepherdson, U.S. economist at Pantheon Macroeconomics, said the scope for accelerating growth is “significant” as the economy opens fully.

The US economy is expected to reach pre-pandemic economic levels before the end of the year. As of last month, the IMF predicted that this would happen before the full recovery of the US Mid-2022.

Forecasts have also improved significantly in the eurozone, however recording a double recession in numbers published on Friday in the first quarter. The latest data have been better than economists feared.

The surrounding economy showed “resistance,” according to Maddalena Martini of Oxford Economics, saying the data “sends encouraging signals about short-term prospects”.

Eurozone production is still 5.5 percent below its pre-pandemic peak, but economists say there is a chance for rapid growth in the second half of the year. ING bank economist Bert Colijn said the “picture of the eurozone’s poor economy will change rapidly” as the spread of coronavirus slows and the European vaccination program accelerates.

Citi economists said there was a chance the eurozone would recover from pre-pandemic production levels before the end of the year, while bank chief economist Holger Schmieding Berenberg predicted that demand would “increase” from May. this level before the end of 2021.

In April, said the NDF activity levels in the eurozone would be below the previous level of the block pandemic by 2022.

Faster-than-expected growth and strong spending on both sides of the Atlantic will put pressure on central banks to limit the emergency recovery measures launched last year to sustain the crisis.

But both the US Federal Reserve and the European Central Bank will undergo any move to remove the heat from the recovery. Central bankers in the world’s major advanced economies have unanimously said they want to see strong evidence of higher inflation before reducing measures to stimulate the pandemic.