European Dividend Stocks
Real GDP Growth in European Union
Source: EUROSTAT
- The euro area economy is continuing to recover and the labour market is improving further, helped by ample policy support. But growth is likely to remain subdued in the first quarter of 2022, as the current pandemic wave is still weighing on economic activity. Shortages of materials, equipment and labour continue to hold back output in some industries. High energy costs are hurting incomes of euro area households and earnings of firms and are likely to dampen spending.
- Looking beyond the near term, growth should rebound strongly in the euro area over the course of 2022, driven by robust domestic demand.
ECB Economic Bulletin, Issue 1/2022.
Recommended Industry Allocation
The economy continues to be in a recovery mode and cyclical industries, like energy, financials and industrials, have some more room for a growth.
However, the fiscal stimulus push inflation higher leading to higher volatility of a stock market. To counter that volatility a portfolio should include stocks from the defensive industries as well.
Please use the diagram only as a broad indication what industries could have growth potential under current economic conditions as the industry performance is influenced by many different factors, not only by a business cycle.
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