Euro­zone growth slows, while France and Italy fal­ter

The Myanmar Times - - Business -

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.

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