The German and French economies are the first and second largest in the Eurozone. Roughly, a third of Eurozone GDP stems from Germany whilst France contributes a fifth; Italy a sixth; Spain and eighth and Holland a sixteenth. Whilst the German economy has been leading the Eurozone recovery, France has been flat-lining for a while. Since Q4 2012, the French economy has seen four quarters of contraction; three quarters of zero growth and (now) five quarters of growth. In comparison, the German economy saw three quarters of contraction and seven quarters of growth during the same period.
[CAD:FXAcademy CTA #121]Data for the performance of the German economy in the first quarter of 2015 shows that it expanded by 0.3%, slowing from a Q4 figure of 0.7%. The figure is below analysts’ expectations which called for growth of 0.5% in Q1. It is believed that the decline was due to weakness in German exports over the quarter. Inflation in Germany has increased in the year to April, standing at 0.5% and up by 0.2% over the comparable March figure.
On the other hand, French economic growth for Q1 2015 came in at 0.6% which is its best level of growth since Q2 2013. Industrial production enjoyed its best quarter for four years. The French national statistics agency, INSEE, estimates that consumer spending in France rose by 1.6% over Q1, thanks in part to savings due to the weaker oil price.
Spain, which had to deal with a banking crisis stemming from the bursting of a property bubble at the height of the Global Financial Crisis posted a quarterly growth figure of 0.9% in Q1. However, unemployment in Spain is still extremely high with 23% of the workforce idle, but has eased from 27% seen in 2013.