GDP growth rates in Europe 2021

The European Union's fastest-growing economy in 2021 was Ireland, with the country's gross domestic product growing by 13.5 percent that year, according to the most recent forecast in 2022. Croatia's economy was expected to have grown by 10.2 percent, with the economy of Malta growing the third-fastest at 9.4 percent. By contrast, the German economy was the slowest growing European economy in this year, with an annual GDP growth of just 2.9 percent in 2021.These fast growth rates contrast with 2020 when the EU economy shrank by 5.9 percent, and almost all European countries took an economic hit.

Challenges going into 2022

The relatively fast growth rates of 2021 are not expected to be sustained in 2022. Although the EU currently has relatively low levels of unemployment, the inflation rate reached a record high of 7.8 percent in March 2022. Although inflation was anticipated to be high in 2022, Russia's invasion of Ukraine added additional pressure to supply chains and commodity prices, exacerbating the issue significantly. Going into 2022, the growth rate for the EU is expected to be 2.7 percent, with Portugal having the fastest growth rate of 5.8 percent, and Estonia the slowest at one percent.

Europe’s largest economies

Germany is by far the largest economy in Europe with a gross domestic product of over 3.3 trillion Euros, followed by the United Kingdom at 2.28 trillion Euros and France at 2.27 trillion Euros. Along with Italy and Spain these countries are the five largest economies in Europe, and while all five have had similar patterns of growth, the gap between them has widened in recent years. While Germany had the largest economy overall, its large population meant that it does not have the highest GDP per capita. Instead, Luxembourg has the highest GDP per capita at over 113 thousand U.S dollars, followed by Switzerland at around 83 thousand U.S dollars.