The Euro area’s economy exhibited stronger-than-anticipated growth in the second quarter of 2024, as indicated by figures released by the European Union’s statistical agency.
Quarterly GDP growth exceeds expectations
The region’s gross domestic product increased by 0.3 percent in the three-month period ending in June, compared to the preceding quarter, the data showed. Economists surveyed by Reuters had projected a 0.2 percent quarterly rise.
The first-quarter GDP was confirmed at 0.3 percent, unchanged from the initial estimate announced earlier this year.
The Euro area had entered a technical recession in the second half of 2023, with GDP contracting in both the third and fourth quarters of the year, according to revised figures released earlier.
Cautious recovery signals, lingering concerns about future trajectory
Bert Colijn, senior Euro area economist at ING, noted in a report that the data suggested the region’s economy is experiencing a modest recovery.
“The question remains where the economy will head from here and recent data do not provide much confidence that the Eurozone economy is further accelerating,” Colijn cautioned.
Germany’s unexpected contraction, gloomy outlook
Data revealed that Germany, the Eurozone’s largest economy, unexpectedly contracted by 0.1 percent in the second quarter, falling short of the 0.1 percent growth expected by analysts polled by Reuters.
Germany was one of just four countries that saw their GDP decline in the three-month period, along  with Latvia, Sweden, and Hungary, according to the European Union’s statistics office.
Klaus Wohlrabe, head of surveys at ifo, stated today in a note that the German economy remained “stuck in crisis” and was not expected to show significant improvement in the third quarter.
Divergent growth patterns
In contrast, Ireland recorded the highest growth at 1.2 percent in the second quarter, while France, the Eurozone’s second-largest economy, saw its GDP grow by 0.3. percent over the same period, according to its statistical agency.
Upcoming inflation data, ECB’s policy options
The latest Eurozone data comes ahead of the release of inflation figures for the region on Wednesday. The fresh data also follows the European Central Bank’s decision to leave interest rates unchanged at its meeting earlier this month, with the option for a cut in September remaining “wide open.”
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