Eurozone growth slows, while France and Italy falter
SECOND quarter growth in the Eurozone slowed sharply weighed down by Brexit concerns and a poor performance in struggling France and Italy.
Growth in the 19-nation eurozone came in at 0.3 percent, down from 0.6pc in the three months to January but unchanged from the initial estimate given last month, the Eurostat statistics agency said.
The 0.3pc quarterly gain was in line with average forecasts compiled by data company Factset.
Analysts said at the time of the initial release that uncertainty in the run-up to Britain’s shock June 23 vote to quit the European Union had likely dampened activity after a very strong first quarter.
Compared with a year earlier, the eurozone expanded 1.6pc in the three months to June, also unchanged from the initial estwimate.
Germany, Europe’s biggest economy, did better than expected with a gain of 0.4pc in the second quarter, down from 0.7pc in the first.
German officials said the relatively strong performance reflected a pick-up in exports while private and public sector consumption also increased.
On the downside, secondranked France slumped to zero growth from 0.7pc in the first, stoking concerns over the economic outlook.
The Bank of France now expects growth of 0.3pc in the third quarter, after its 0.2pc growth estimate for the second quarter was squashed.
French industrial production dropped for a second straight month in June, an outcome analysts said was alarming. Output fell 0.8pc in June, after dropping 0.5pc in May.
For the eurozone as a whole, June industrial output rose 0.6pc after a fall of 1.2pc in May to give a year-on-year gain of 0.4pc, Eurostat said.
Italy, whose banks are under great pressure, slowed to zero growth in the second quarter after a rise of 0.3pct in the first.
The Italian economy emerged from three years of recession at the start of 2015 but gains since then have been minimal.
The International Monetary Fund last month cut its Italy growth forecast from 1.1pc to 0.9pc, largely to take account of the negative Brexit impact.
Spain, still bouncing back strongly after years in recession, grew 0.7pc, just down from the 0.8pc expansion of the first quarter.
Non-Eurozone Britain gained 0.6pc from 0.4pc previously.
Earlier this month, the Bank of England slashed interest rates to a record low 0.25pc and announced a vast stimulus package to offset the fallout from the Brexit vote.