Vaccines, consumer and business confidence spark strong EU growth amid concerns over new pandemic wave

European Union (EU) economies have emerged strongly from the economic slump caused by the COVID-19 pandemic, though analysts are concerned that new virus variants may halt further growth.

The latest economic models show that Italy and Spain are on pace to see their strongest economic growth in more than 40 years this year, with Italy's economy expected to grow 5.6 percent and Spain's 6.2 percent in 2021. Those estimates are 0.6 and 0.3 percent above previous estimates a month earlier, respectively.

Germany, the EU's largest economy, last week raised its domestic economic growth estimate for 2021. Expectations include that German pharmaceutical firm BioNTech, co-developer of the widely distributed Pfizer coronavirus vaccine, could alone add 0.5 percent to Germany's economic growth this year.

Last month, the EU's statistics office reported that economies from the 27-nation bloc grew 13.2 percent in the second quarter of the year compared to the same period in 2020.

The strong growth figures, however, should also be viewed from the perspective of a low baseline in 2020, when the continent was mostly under coronavirus-induced lockdowns, dramatically slowing economic activities. The impacts were especially severe in Italy and Spain, which rely heavily on tourism.

But the strong economic responses across the EU, coupled with high vaccination rates, helped to restore consumer and business confidence and boost exports faster than most analysts had expected.

"The reopening of non-essential businesses helped spur growth in retail sales near pre-pandemic levels," Tej Parikh, a director at Fitch Ratings, told Xinhua. "The economic momentum from the reopening is increasing."

He noted, however, that the spread of the highly transmissible Delta variant of the coronavirus still represents the "biggest downside risk" for European economies.

Nicola Nobile of Oxford Economics, an independent economics research group, said in a report that the "Delta variant will likely cause a surge in COVID-19 cases," though the "vaccination process means any new waves (of the pandemic) should be significantly less deadly than previous ones."

Giuseppe De Arcangelis, a professor of international economics at Rome's Sapienza University, called the latest economic data "reassuring," though he also expressed some concerns over the pandemic.

"From what we can see, the situation remains under control," De Arcangelis told Xinhua. "But there is still so much uncertainty that it is hard to be confident. Everything could change in a week or two."

De Arcangelis said the uncertainty requires coming up with more growth scenarios, both on the high and the low end, in order to get a complete picture. He said one scenario that worries him involves vaccines.

"The vaccine rollout in Europe has been very successful, and it is the main reason for optimism, even as the Delta variant gains ground," De Arcangelis said. "But I am concerned that we may need more vaccines to keep up the momentum. I hope we won't have vaccine supply problems in the coming weeks and months."