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Economic growth in the euro area was cut in half in April-June, and inflation slowed sharply in July, as the unemployment rate hit a 11-year low, data from the Statistical Office of the European Union.
Eurostat's preliminary flash estimate of gross domestic product growth in the 19 euro-sharing countries indicated that the economy was growing by 0.2% qoq, down by 0.4% of the previous three months as forecast by economists.
Growth in the euro area has therefore returned to the anemic rates observed in the third and fourth quarters of last year.
On a year-on-year basis, euro area GDP growth was 1.1%, down from 1.2% in the January-March period.
The slowdown in growth is reflected in a slowdown in consumer price growth – Eurostat's flash estimate showed that inflation in July of the previous year was 1.1%, down from 1.3% in June, as forecast by economists.
The overall inflation rate was the lowest in 17 months.
The slowdown in the inflation rate should further reinforce market expectations, namely that the European Central Bank, which wants to keep inflation below 2%, but close to 2%, will further relax its policy. in September.
Underlying inflation, which eliminates the volatile components of unprocessed food and energy and the ECB is closely scrutinizing policy decisions, also fell to 1.1% in July, after 1.3% in June.
The even narrower measure, excluding the prices of alcohol and tobacco, which many market economists consider has fallen from 1.1% to 0.9%.
The slowdown in price growth came as unemployment in the euro area hit its lowest level in 7.5 years, with 7.5% of the labor force in June, Eurostat data showed.
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