14th August 2015
Eurozone growth has slowed to 0.3% in the second quarter but which countries were the winners and losers.
The latest figures for eurozone economic growth showed it slowed to 0.3% in the second quarter from 0.4% in the first quarter, which is disappointing for markets which had expected 0.4% growth.
However, given the concerns around Greece ‘the latest figures show robust and steady recovery’ said Azad Zangana, senior economist at Schroders.
Consensus on Germany for 0.5% GDP growth was missed as actual growth came in at 0.4% but the biggest disappointment came from France where ‘pick up in activity seen in the first quarter turned out to be too good to last’, said Zangana.
Zangana said: ‘The French economy was stagnant in the three months to June, compared to 0.7% growth in the first quarter. Much weaker domestic demand was rescued by an acceleration in exports growth.
‘Household consumption continued to grow in the latest figures, albeit much slower than the past year. However, the most disappointing aspect of the French data is that the recession in investment has continued. Investment in France has failed to grow for six quarters.’
Italy also proved disappointing, missing consensus expectations of 0.3% by managing just 0.2%, compared with 0.3% in the first quarter.
Zangana said: ‘The Italian economy continues to struggle with domestic rigidities against an increasingly more competitive international backdrop.’
Spain showed another strong quarter of 1% growth, now up 3.1% year-on-year.
Greece also beat expectations with a ‘miraculous 0.8% growth rate’, said Zangana.
‘Expectations were for a sharp fall in activity given the introduction of capital controls. The negative impact may yet hit in the third quarter,’ said Zangana.
‘Looking ahead, we forecast a slight acceleration going into the second half of the year as further falls in global energy prices should boost the purchasing power of households. Concerns over growth in emerging markets, China in particular, may hit investment in Germany, the Netherlands and Austria, which all disappointed in the second quarter. However, our expectations for stronger growth in the US over the rest of this year should offset emerging market weakness.’