BRUSSELS: The economic expansion in the 19-country eurozone slowed in the second quarter, official data showed Tuesday, with the reading for the previous quarter being revising down a notch.
Seasonally adjusted gross domestic product (GDP) rose by 0.3 percent in the single currency bloc and by 0.4 percent in the wider European Union (EU), compared with the previous quarter, said Eurostat, the EU’s statistic agency.
In the first three months, GDP grew by 0.5 percent in the eurozone, Eurostat said, lower than the previous estimate of 0.6 percent published in August. For the EU, the reading was confirmed as 0.5 percent.
Disparity was recorded among member states. Romania saw the highest growth of 1.5 percent from April to June, followed by Hungary, of 1 percent, while growth stalled in France, Italy and Finland, data showed.
Looking into the components and contributions to growth in the second quarter, household final consumption expenditure rose by 0.2 percent in the eurozone and by 0.4 percent in the EU. Gross fixed capital formation was stable in the euro area and increased by 0.2 percent in the wider EU.
Exports and imports as well registered expansion in both zones, said Eurostat. It was widely expected that the Eurozone’s growth was unlikely to pick up dramatically between July and September as survey data showed business activities failed to gain strong upward momentum. Nevertheless, economists cautioned that the economic growth could further slow over the rest of this year.
“More timely evidence suggests that GDP growth might have slowed further in the third quarter,” said Jack Allen, a European economist at the London-based Capital Economics.
The latest composite purchasing managers’ index (PMI) in the single currency bloc came in at 52.9 in August, down from 53.2 in July and recording a 19-month low, largely due to weaker economic growth in the bloc’s powerhouse Germany, whose PMI rose at the slowest pace for 15 months.
Somehow the Eurozone and Britain still suggested economic resilience despite the Brexit vote in June, which dragged the continent into great uncertainties, but officials had warned that the negative impacts were more likely to emerge in next year.
Tuesday’s data came two days ahead of a policy meeting of the bloc’s central bank. The European Central Bank was not expected to announce any major stimulus measures and were expected to maintain the already record low interest rates.
The Capital Economics predicted that the Bank would announce a six-month extension to its asset purchase program.
