Gross domestic product in the eurozone increased 0.3 per cent, undershooting analysts’ estimates of 0.4 per cent, as France’s economy stagnated and Germany, Italy and the Netherlands grew less than expected.
While the currency bloc remains on track for its best year since 2010, the latest figures, released by Eurostat, the commission’s statistics agency, underline how the eurozone is still struggling to recover from the economic crisis.
Unemployment is still in double figures and data from Germany indicate that companies in the eurozone’s economic powerhouse remain reluctant to invest, regardless of record low interest rates. The region’s economy remains slightly smaller than in the second quarter of 2008, before the collapse of Lehman Brothers, the US investment bank.
The eurozone’s central bankers began buying €60bn of mostly government bonds a month in March to spur growth and raise inflation, which Eurostat confirmed at 0.2 per cent in the year to July. The ECB targets inflation of below but close to 2 per cent.
The loss of momentum at the region’s core came despite solid performances in parts of the periphery — including Greece, which grew by a surprisingly strong 0.8 per cent, and Spain.
French growth ground to a halt as consumers put the brakes on spending, undermining President François Hollande’s attempts to rekindle the eurozone’s second-largest economy.
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© Financial Times
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