FRANKFURT: Europe appears to have weathered a pandemic-induced recession better than many feared, a slew of indicators suggested on Tuesday, but prospects for a second wave of infections and a hard Brexit are once again raising talk of more stimulus.

Having shrunk by over a tenth last quarter, the eurozone economy is quickly regaining strength on the back of relatively resilient consumption, supported by job subsidy schemes, tax cuts and lavish stimulus from the European Central Bank.

Indeed, consumer confidence in the 19 countries sharing the euro rose to -13.9 this month from -14.7 in August, the European Commission said, a reading below its long-term trend but easily beating market expectations.

Adding to the positive news, the Ifo Institute upgraded its forecast for Germany, expecting GDP in the euro zone’s biggest economy to shrink 5.2% this year, a big improvement on its last projection for a 6.7% drop or the Bundesbank’s 7.1% forecast.

The figures suggest that unprecedented fiscal and monetary support have insulated the bloc from an unprecedented recession and households began to spend once again as most restrictions were lifted during the summer months.

Unemployment in the region has barely risen compared to some other major economies and, at 7.9%, has still not moved far from the more than 10-year low of 7.2% hit earlier this year.

Germany’s HDE retail association now expects nominal sales to grow by 1.5% this year, a sharp upward revision from its previous estimate for a 4% drop, helped by a surge in online sales and stimulus measures that have included a temporary VAT cut and cash handouts for parents.