Eurozone economy grinds to a halt in Q2

The eurozone’s faltering recovery ground to a halt in the second quarter of 2014, dragged down by weaker-than-expected performances by the region’s two biggest economies — Germany and France.

Gross domestic product in the 18-member currency bloc came in at zero in Q2 — down from 0.2 per cent in the first three months of the year, the European Union’s statistics office Eurostat said Thursday.

Analysts had expected the region to expand by 0.1 per cent in the April-June quarter.

The disappointing eurozone GDP data came in the wake of a slowdown in both Germany and France, which offset signs of a rebound in the economies that have been at the centre of the region’s long—running debt crisis.

While the Spanish economy grew by a solid 0.6 per cent, Greece’s six—year long recession eased somewhat, with the country’s GDP contracting by just 0.2 per cent. The Greek economy had slumped by 1.1 per cent year—on—year in the first three months of 2014. No quarterly figures were available for Greece.

The German economy, meanwhile, contracted by 0.2 per cent after expanding by 0.7 per cent in the first quarter, while France stagnated for the second consecutive quarter, Eurostat said.

Analysts had expected German GDP to have shrunk by 0.1 per cent, while France’s had been predicted to expand by 0.1 per cent.

Italy stumbled back into recession in the second quarter, with the region’s third—biggest economy contracting by a more—than—forecast 0.2 per cent after it shrank by 0.1 per cent, Eurostat said confirming national data released earlier this month.

Year on year, the eurozone economy also lost momentum, slowing from 0.9 per cent in the first quarter to 0.7 per cent in the three months ended June.

The 28—member EU economy also slowed, expanding by 0.2 per cent compared with 0.3 per cent in the first quarter.

Year on year, GDP in the EU grew by 1.2 per cent in the second quarter.

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