by Growth in the euro area fell to 0.3% in the second quarter from 0.6% in the first. Nevertheless, leading indicators point to post-Brexit resilience and we are leaving our full-year forecast unchanged Euro area real GDP expanded by 0.3% quarter-on-quarter (q-o-q) in the second quarter (1.2% q-o-q annualised, 1.6% year-on-year), in line with expectations and our forecast. This compares with GDP growth of 0.6% q-o-q in the first quarter.According to preliminary estimates by country, growth in Spain slowed only slightly in the second quarter, whereas French growth slowed more than expected. Even though a slowdown in French economic activity was expected after a strong first quarter, the details were disappointing. One-off factors such as strikes in May and June skewed Q2 GDP data to the downside, but the latest indicators , such as PMI data, are suggesting the French economy is proving relatively resilient. Once again, Spain posted impressive GDP growth in the second quarter, in spite of an enduring political impasse. The Spanish economy grew by 0.7% q-o-q in Q2 (+2.8% q-o-q annualised; 3.1% y-o-y), in line with expectations and only slightly slower than the previous quarter (0.8% q-o-q). Overall, we forecast the Spanish economy to register 2.8% growth this year, well above growth for the euro area as a whole.
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Nadia Gharbi considers the following as important: euro area forward indicators, euro area GDP, euro area growth, European economic sentiment, Macroview
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Growth in the euro area fell to 0.3% in the second quarter from 0.6% in the first. Nevertheless, leading indicators point to post-Brexit resilience and we are leaving our full-year forecast unchanged
Euro area real GDP expanded by 0.3% quarter-on-quarter (q-o-q) in the second quarter (1.2% q-o-q annualised, 1.6% year-on-year), in line with expectations and our forecast. This compares with GDP growth of 0.6% q-o-q in the first quarter.
According to preliminary estimates by country, growth in Spain slowed only slightly in the second quarter, whereas French growth slowed more than expected. Even though a slowdown in French economic activity was expected after a strong first quarter, the details were disappointing. One-off factors such as strikes in May and June skewed Q2 GDP data to the downside, but the latest indicators , such as PMI data, are suggesting the French economy is proving relatively resilient. Once again, Spain posted impressive GDP growth in the second quarter, in spite of an enduring political impasse. The Spanish economy grew by 0.7% q-o-q in Q2 (+2.8% q-o-q annualised; 3.1% y-o-y), in line with expectations and only slightly slower than the previous quarter (0.8% q-o-q). Overall, we forecast the Spanish economy to register 2.8% growth this year, well above growth for the euro area as a whole.
The breakdown by expenditure component is not yet available, but evidence from high-frequency data suggests that domestic demand was once again the main engine of growth in the euro area, while the drag from net trade seems to have softened.
On a separate note, the first set of euro area sentiment indicators covering the period since the 23 June Brexit referendum was more resilient than expected. Composite purchasing manager index (PMI) figures remained broadly stable and even improved in some core countries (Germany and France). Moreover, the European Commission’s business indicator rose in July for the euro area as a whole. At this stage, leading indicators point to the UK referendum having only minor effects on the euro area economy and are consistent with GDP growth of around 0.3% q-o-q in Q3, in line with our forecasts.
As a result, we are keeping unchanged our euro area GDP growth forecast of 1.5% for 2016 as a whole.