Macroeconomic Drivers of Economic Recovery: An Analysis of Household Consumption, Investment, Government Expenditure, and Net Exports in European Union Countries (2021–2025)
AUTHORS
Rizky Yudaruddin,Faculty of Economics and Business, Mulawarman University, Indonesia
Djoko Setyadi,Faculty of Economics and Business, Mulawarman University, Indonesia
ABSTRACT
This study investigates the role of key macroeconomic components in shaping economic recovery across European Union countries during 2021–2025. In particular, the study focuses on household consumption, investment, government expenditure, and net exports as primary determinants of Gross Domestic Product (GDP) in the post-pandemic environment. The analysis utilizes secondary data obtained from the Eurostat database, covering multiple EU member states over five years. A quantitative approach is employed, and the relationships among variables are examined using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS. The post-pandemic period presents a distinct macroeconomic context characterized by policy-driven recovery, shifts in consumption patterns, and disruptions in global trade. Therefore, understanding the relative contribution of domestic and external demand components becomes essential. The findings reveal that, collectively, the selected macroeconomic variables significantly contribute to variations in GDP. At the individual level, investment emerges as the most influential factor, indicating its central role in supporting economic restructuring and long-term growth. Household consumption and government expenditure also demonstrate substantial effects, particularly in reinforcing aggregate demand during the recovery phase. On the other hand, net exports have a comparatively limited influence, reflecting ongoing uncertainties in international trade and external demand. These results suggest that economic recovery within the European Union is largely driven by domestic factors, with investment playing a leading role. Accordingly, policymakers are encouraged to prioritize investment-oriented strategies, strengthen consumption capacity, and enhance trade resilience to ensure sustainable economic growth in the evolving global landscape.
KEYWORDS
: Economic recovery, Gross Domestic Product (GDP), Investment, Household consumption, Government expenditure, Net exports, European Union
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