2023-08-16 18:00:58
The euro zone economy registered an expansion of 0.3% in the second quarter of this year compared to the immediately previous quarter, when it remained stagnant, and after the 0.1% quarter-on-quarter drop registered in the last quarter of 2022, according to the data published this Wednesday by Eurostat, the statistical office of the European Union. However, while this is progress, the weakness of economic growth in the euro area and the European Union is clearly seen in the year-on-year rates. The euro area’s GDP grew by 0.6% in the second quarter compared to the second quarter of 2022, practically half the rate it had registered at the beginning of the year in the interannual rate. The Gross Domestic Product (GDP) of the European Union as a whole had the worst performance between April and June, since it stagnated after growing 0.2% in the first quarter of this year and having also registered a contraction of 0.1% in the last three months of 2022. If we compare it with the second quarter of 2022, the EU’s GDP increased by 0.5%, a third of what it was growing at the end of last year.
In Spain, the registered data show a slight decrease in the economic growth rate, which went from 0.5% in the first quarter to 0.4% in the second quarter. But the country that worries the most is Germany, due to its driving capacity of the European economy. In his case, the data is not encouraging, although it improves a bit. Between April and June, Germany stagnated, having entered a technical recession in the first quarter, while France accelerated its expansion to 0.5% from 0.1%. By contrast, in Italy GDP fell by 0.3% after growing by 0.6% in the first quarter. This is with regard to the large economies of the eurozone. Among the EU countries with published data, the highest quarterly growth corresponded to Ireland (3.3%), ahead of Lithuania (2.8%) and Slovenia (1.4%). For their part, the countries with the worst GDP performance in the quarter were Poland (-3.7%), Sweden (-1.5%) and Latvia (-0.6%).
This Wednesday it was also known that the Netherlands entered a technical recession (two consecutive quarters with negative growth) during the second quarter of the year. It is the first time since the pandemic that the Netherlands has fallen into recession. Between April and June, GDP fell by 0.3% after falling by 0.4% between January and March. A complicated economic situation that adds to the already agitated political situation after the resignation of the Prime Minister, Mark Rutte. The weakening of the European economies is influenced by the sharp increase in interest rates, with which the European Central Bank seeks to control inflation, as well as the containment of exports due to lower demand from trading partners. Precisely, China decided this week to lower its interest rates to boost the economy.
Industrial production
Europe continues to have less activity than the United States, which grew by 0.6% in the second quarter after increasing GDP by 0.5% in the first. Proof of this weakening is the drop in industrial production, which fell by 1.2% in June both in the euro area and in the EU as a whole compared to the same month last year. However, compared to the month of May, a period in which it remained stagnant, seasonally adjusted industrial production increased in June by 0.5% in the euro area and 0.4% in the EU, according to Eurostat estimates. . By sectors, the one that registered the best behavior was energy production, compared to the immediately previous month, while the production of durable consumer goods, capital goods, intermediate goods and consumer goods fell. However, compared to June of last year, energy production in the eurozone fell 7.8% and durable consumer goods fell 5.2%. The positive data is that capital goods, which reflect business investment, grew by 4.4% in the interannual rate.
Employment
On the other hand, the number of employed persons increased by 0.2% both in the euro area and in the European Union as a whole in the second quarter of this year compared to the previous quarter. In the first quarter of 2023, employment had increased by 0.5% in both areas, according to updated Eurostat data.
Compared to the same quarter of the previous year, employment increased by 1.5% in the euro area and 1.3% in the EU in the second quarter of 2023, after rising by 1.6% in both areas in the first quarter of 2023. As is known, Spain has registered a record number of employed persons, with almost 21 million affiliates to Social Security, but its unemployment rate (11.7%) is double the European average (5.9%).
#euro #area #economy #grows #quarter #stagnating