Germany’s surprising contraction in the second quarter of this year was mainly due to the halt in investments in capital goods and buildings, as the industrial sector continues to weaken under the pressure of rising interest rates.
The second estimate of the quarter-on-quarter growth rate of gross domestic product has been published (GDP) of the eurozone for him second trimester of 2024which is located in the 0,3%. This figure is identical to the previous quarter y fits the forecasts.
France grew a 0,3% this quarter, the same as the previous quarter. Although the celebration of Olympics in the third quarter of the year could give an economic boost to the countryit is likely that the political uncertainty that persists limit it to a certain extent.
He growth of Spanish GDP was also from 0,8% in the second quarter of the year, the same as the previous quarter. Lithuania also grew at the same pace as in the first quarter of 2024, a 0,9%.
The growth of Belgium’s GDP fell slightly to 0.2%compared to 0.3% in the previous quarter, while that of Portugal experienced a sharper drop to 0.1% this quarter, compared to 0.8% the previous quarter. Other countries that saw a slight decline in growth this quarter were Chiprewhich recorded a GDP growth rate of 0.7%, up from 1%, and Slovakiawhich stood at 0.4%, compared to 0.6%.
Italia registered a slight decline in growthof 0.2% in the second quarter of 2024, compared to 0.3% in the previous quarter. ING estimates that this weakness is likely due to a decline in net exports and industrial weakness.
Irish economy bucks trend with growth
Besides, Ireland experienced a considerable growth rebound this quarterwith a GDP of 1.2%, compared to 0.7% in the first quarter of the year. Finland also recorded a small rise0.4% compared to 0.2%.
However, the eurozone’s largest economy, Germanyregistered a surprising contraction of 0.1%compared to growth of 0.2% in the first quarter of the year.
The second estimate of the eurozone’s annual growth rate for the second quarter of 2024 was placed at 0,6%in line with preliminary estimates, and above the 0.5% of the previous quarter. It is also about the highest growth rate in the last five quarters. According to the European Commission, it is probable that the euro zone economy grow and 0.8% in 2024.
This Wednesday, the preliminary estimate of the quarterly variation figures for the employment in the eurozone for him second quarter of 2024. According to Eurostat, the number of people in employment increased 0.2% in the second quarter, compared to the previous quarter. This figure was in line with analyst expectationsbut it was slightly lower than the 0.3% of the previous quarter.
He french index CAC 40 rose 0.43% mid-morning Wednesday following the release of GDP and unemployment data, while the German DAX index rose 0.40%.
German economy records a surprising drop in growth in the second quarter
The surprising contraction of the German economy in it second trimester this year was mainly due to the stoppage of investments in capital goods and buildingssince the industrial sector continues to weaken under the pressure of rising interest rates.
According to the European Commission, it is probable that the German economy grows and 0.1% this year. If so, it would be a rebound compared to the 0.3% contraction recorded last year, since the domestic demand begins to increase gradually.
However, it is expected that the investments are kept well below pre-pandemic levelsdue to increase in financing costs. According to the Federal Statistical Office, it is also likely that exports continue to be moderate this year.
