In the Monthly Economic Bulletin, ECB said Eurozone economy is “on track for strong growth” in Q3. Manufacturing is expected to “perform strongly” despite supply bottlenecks. Reopening is supporting a “vigorous bounce-back” in services sector. However, Delta variant “could dampen this recovery in services, especially in tourism and hospitality.”
Economic activity is expected to return to pre-crisis level in Q1 next year. But there is “still a long way to go” before the damage is offset. Thus, “significant policy support remains essential”. It added, “an ambitious and coordinated fiscal policy should continue to complement monetary policy in underpinning confidence and supporting spending”.
