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The euro area economy slowed further during the three months of June, as exports faltered and business confidence weakened by concerns over future relations with key trading partners in the eurozone. monetary zone. growth accelerated in the second quarter. The growth differential in the United States has been the largest since the second half of 2014, with both economies developing at roughly the same pace since then.
If it persists, this divergence could widen the gap between the interest rates of the Federal Reserve and the European Central Bank, while slowing down the progress of the eurozone debt crisis including the very high rates of youth unemployment. The statistical agency of the European Union said on Tuesday that the combined gross domestic product of the 19 countries that use the euro – the widest measure of the goods and services they produce – has increased at an annualized rate of 1.4% in the second quarter, down 1.5% in the first. In the United States, same-measure growth was 4.1%
Compared with the three months of March, euro-zone GDP was 0.3% higher, the lowest in two years. Compared with the second quarter of 2017, it was 2.1% higher.
The euro zone economy entered 2018 after experiencing its fastest expansion in ten years in 2017. However, growth slowed sharply in the first three months. This year, a number of policy makers and many economists have attributed unusually cold weather and a series of strikes in Germany and France. However, the failure of the economy to bounce back in the second indicates that other forces are at work.
While Eurostat did not provide details on how the different parts of the economy functioned, previously published data and business surveys indicate a fall. export growth during the first half of 2018 and a commercial optimism that appears to be linked to growing trade tensions between the US and the EU, as well as uncertainties about access to British markets after leaving the country next year.
Confidence could rebound if talks to resolve transatlantic tensions advanced on July 25, said President Trump and European Commission President Jean Claude Juncker.
The rise in oil prices is another negative factor, since they penetrate the purchasing power of households.
The ECB confirmed Thursday its intention to end its stimulus package in December, but a period of weaker growth. It may also be reluctant to raise its key interest rate in 2019.
Figures also published by Eurostat show that the annual inflation rate reached 2.1% in July, exceeding the annual inflation rate. objective of the ECB.
anti-establishment political parties, as this would come at a time when some of the eurozone members have not yet fully recovered from the global financial crisis.
In a separate statement, Eurostat said that the unemployment rate in the euro area was stable at 8.3% in June, but the number of unemployed rose slightly for the first time since July 2017, a sign of Slowing growth
For some members of the euro area, this may be a positive development, as they are about to deplete their reserves of jobless workers
"The strength of economic growth means that our economy is at risk of reaching its full potential, gives rise to risks of overheating or boom-bust cycles "
Mark Cassidy,
The economic director of the Central Bank of Ireland warned on Tuesday
that this concern could seem a very distant threat for his Greek and Italian counterparts, who have lagged behind the recovery of the zone. euro, now entering its sixth year.
The unemployment rate in Italy rose from 10.7% in June to 10.9%. Among those under 25, the unemployment rate went from 32.2% to 32.6%.
While Italy has barely survived stagnation, the Spanish economy has seen the fastest growth among the four largest in the eurozone. 2013. However, it also slowed in the three months ending in June, posting its weakest expansion in four years.
Write to Paul Hannon at [email protected]
