Wed, Aug 15, 2018 - Page 10 News List

Eurozone second-quarter growth exceeds forecasts


Eurozone growth was better than expected in the second quarter of this year, flash estimates from the EU’s statistics office Eurostat showed yesterday, in a sign that the negative effect of global trade tensions might be seen only later in the year.

While the economy expanded 0.4 percent in the second quarter, greater than expectations of 0.3 percent growth, industrial output in the in 19-country currency bloc fell sharply in June, driven by a collapse in machinery and equipment investment, Eurostat said in a separate release.

Eurostat’s flash estimate of 0.4 percent quarterly growth was greater than its previous estimate of 0.3 percent growth.

The agency also revised up year-on-year growth to 2.2 percent, compared with its previous 2.1 percent estimate.

Economists polled by Reuters had expected a 0.3 percent quarterly expansion and a 2.1 percent year-on-year rise.

Eurostat’s upward revision came after Germany, the bloc’s largest economy, recorded a better-than-expected 0.5 percent expansion in the second quarter, driven by consumption and state spending that could signal the beginning of a shift from Germany’s export-led economic model.

However, Eurostat said the bloc’s industrial output in June fell by 0.7 percent monthly, recording a larger drop than expected by economists polled by Reuters who had forecast a 0.4 percent fall.

The eurozone’s highly volatile industrial production had expanded by 1.4 percent in May, Eurostat said, revising up its previous estimate of 1.3 percent growth.

The production plunge was mostly driven by a 2.9 percent drop in the output of capital goods, like machinery, in a sign that firms might be preparing for slower growth in the coming months.

The output of consumer and intermediate goods also fell, while the production of energy increased by 0.5 percent from May.

Industry output was up by 2.5 percent year-on-year in June, and the May figure was revised up to 2.6 percent, compared with a previous estimate of a 2.4 percent increase.

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