BRUSSELS: Euro zone growth was better than expected in the second quarter, flash estimates showed on Tuesday, in a sign that the negative effects of global trade tensions might be seen only later in the year. However, while the economy expanded by 0.4 per cent in the second quarter, above forecasts of 0.3 per cent growth, industrial output in the in 19-country currency bloc fell sharply in June driven by a collapse in machinery and equipment investment, European statistics office Eurostat said.
Eurostat’s flash growth estimate was also higher than its previous estimate of 0.3 per cent growth. The agency also revised up the year-on-year growth to 2.2 per cent from its previous 2.1 per cent estimate.
The revised monthly figure, if confirmed by final data to be released on September 7, would show that the bloc has maintained a 0.4 per cent growth pace in the first two quarters of the year, confounding initial fears of a slowdown in the second quarter. The better-than-expected estimate could increase the European Central Bank’s confidence in winding down its asset purchase programme, but the growth outlook remains unclear, given the industrial output data.
The bloc was outperformed by the United States which doubled to 1.0 per cent its quarterly growth from 0.5 per cent in the first quarter of the year.
Eurostat’s upward revision came after Germany, the bloc’s largest economy, recorded a better-than-expected 0.5 per cent 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. — Reuters
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