European growth heats up again
European markets show signs of growth, showing that perhaps austerity, instead of stimulus, will lead to a faster recovery.
Stefan is an economist currently working in Sweden.
Subscribe Today to the Monitor
Industrial production in the euro area in May was up 0.9% compared to the previous month and 9.4% compared to May 2009, while industrial new orders (a leading indicator of future industrial production) in the euro area in May rose 3.8% compared to April and 22.7% compared to May 2009. Meanwhile, both the manufacturing and non-manufacturing surveys for July showed accelerating growth.
Just because growth is robust -especially by European standards- right now doesn't necessarily mean of course that it will stay that way. However, the biggest risk factor isn't really the austerity measures. Latvia had above average growth both with regard to industrial production (+13.2%) and even more so industrial new orders (+69.0%) "despite" its tough austerity program. Instead, the risks consist of a potential downturn in America and a potential serious slowdown in Asia, as well as further rapid appreciation of the euro (which is up about 8% from its lows).
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.