Germany Leads European Q2 Growth

By: Dr. Mike Campbell

Almost like the end of year school report, European economic growth reports have been trickling in recently. Whilst the epithet “Could do better” can be applied universally, given the state of the global economy and the benchmarks set by the previous year’s results, they provide some interesting information. At this stage, data is provisional and may be revised up or down.

Top of the class is Germany which produced growth figures of 2.2% for the period from April to June; a record for the post re-unification period. The growth was credit on a strong export performance helped by the weaker Euro. The magnitude of the growth surprised analysts who had expected to see it come in between 1 to1.5%. Growth within the Eurozone as a whole was 1% in Q2. French output tripled from 0.2% in Q1 to 0.6% in Q2 and Spanish quarterly GDP doubled to 0.2%. Italy, which has its own debt crisis, returned an unchanged performance of 0.4% in the second quarter. The UK (which is not a Eurozone economy, but is a member of the EU) posted a better than expected performance of a 1.1% in GDP for Q2.

Greece showed the worst performance of any Eurozone country with its economic output slipping back by 1.5% over the quarter, largely as a result of the austerity measures that have been put in place to check the nation’s sovereign debt crisis and return the deficit towards the Eurozone target of 3% of GDP.

As a whole, the European data is in contrast with comparable figures emerging from Japan and America where Q2 performance has indicated that the recovery is slowing down. The figures for China, too, showed a reduction in economic output, but the reduced rate is still the strongest level of growth seen in any nation. The new term has already begun, so I shall provide a progress report when Q3 data comes in.