Euro Area GDP Increases by 0.3% and by 0.4% in the EU

The latest Eurostat figures have unveiled that GDP in the euro area has increased by 0.3%, with the whole of the European Union’s  (EU)  growth reaching 0.4%, during the second quarter for this year.

Despite the positive figures, quarter on quarter growth had slowed compared to the first three months of this year, as GDP then hiked in the euro area and the EU by 0.6% and 0.5% respectively.

The decision by the British electorate to leave the EU seems to have played an important part in the easing of growth, as the UK walking away from the EU has resulted in increasing business uncertainly across the entire trade area.

The latest figures also fared partially unfavourably with annual growth figures, compared to  the same quarter last year the economy grew in the euro area by 1.6% and 1.8% in the EU, this was down by 0.1% in the euro area, although the figures remained stable for the EU.

Since the first quarter of 2013, both the euro area and the EU have achieved growth after plummeting in the wake of the 2008 financial crash, but have often lagged behind the United States until recent quarters, whose economy also grew by 0.3% in the second quarter.

Hungary proved to the best performer, as due largely to their construction industry growth plummeted to a minus 0.7% in the first quarter this year, but has sensationally  leapt up to 1.1%, Romania recorded the highest figure, as their GDP reached 1.5%.

Poland and Slovakia also excelled between April and June, with growth reaching 0.9%, with the Polish economy proving to be robust, leaping up from the minus 0.1 figure from the first quarter.

The UK’s GDP managed to grow by 0.2% to 0.6% in the second quarter, but the period was largely before the ‘Brexit’ vote, most figures since the referendum result has pointed to the British economy falling, while France suffered as their growth was reduced down to zero falling from 0.7%, signalling that President Hollande and his administration will have to reflect further on how to kick start their economy.

So far CET, the EUR/USD rate is currently buying $1.114, falling from $1.116,  reacting negatively to the announcement on the slowing of the GDP figures.

 Germany Growth Eases in Second Quarter

 Official figures have revealed that the German economy had continued to expand in the second quarter of the year at 0.4%, despite the positive figures this is down from the 0.7% of growth that was recorded in the first three months of this year, for Europe’s leading economic force.

Comparing the first two quarters of the year shows that the main contribution  to growth arrived from an encouraging trade balance between exports and imports, both household final consumption expenditure, and government final consumption expenditure also supported the economy.

Growth was weighed down by weak gross capital formation, where a country’s capital accumulation is calculated over an accounting period which includes additions in such areas as equipment, tools, transportation assets and electricity, a decline was recorded especially in machinery and in construction.

The economy grew 3.1% more than for the same period last year, which was the largest annual increase on quarterly figures for five years, in the first quarter the year on year comparison was 1.8%.

Employment reaching 43.5 million, which was an increase of 529,000 compared to the same period for last year, was also thought to be influential in the amount of growth achieved.