Eurozone Growth Improves As Estimated In Q2

Robyn Ryan
August 16, 2017

But overall growth was dampened by net foreign trade since exports rose less strongly than imports, which the vibrant domestic economy sucked in at a higher rate.

The Xetra DAX in Frankfurt edged up 0.3 per cent to 12,199.60 after the GDP growth report.

ING economist Carsten Brzeski says "though some kind of a slowdown from current growth rates looks nearly inevitable" many signs point to more growth ahead and there's "little reason to fear a sudden end to the current performance".

"The economy looks strong and robust", supported by domestic demand, said Andreas Rees, UniCredit's chief Germany economist.

Perhaps the most astonishing growth was reported in the Czech Republic, where GDP expanded by an impressive 4.5 percent on the year in the second quarter, some 1.5 percentage points above forecasts and up from 3 percent in the first quarter of the year. This compared with a consensus forecast of 1.9 percent.

"The unemployment rate is very low, the economy has done very well particularly by the eurozone standards, so it's quite possible that it will boost support for the incumbent party".

The continued upswing will likely bolster Chancellor Angela Merkel ahead of the September 24 vote, with polls giving her conservatives a double-digit lead over their junior coalition partners, the Social Democrats.

The French economy, the second largest in the eurozone, grew 0.5% in the second quarter, helped by stronger exports according to preliminary data.

As a effect, and following revisions to GDP data before 2017, economists at Commerzbank raised their growth forecast for the German economy to 2% this year from an earlier estimate of 1.6%. Outside the euro zone, BritainĀ“s economic output grew by 0.3 percent on the quarter, edging up from 0.2 percent in the first three months.

The euro area economy expanded as initially estimated in the second quarter, flash estimate from Eurostat showed Wednesday.

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