ZURICH • The euro-area economy expanded apace in the second-quarter (2Q), a sign the bloc’s upswing is becoming increasingly robust and self-sustaining.
Gross domestic product in the 19country region rose 0.6% in the three months through June, after increasing 0.5% at the start of the year. That’s in line with the median estimate in a Bloomberg survey of economists.
Figures from economic confidence to joblessness and manufacturing output have signalled the economy was gaining steam, underpinning expectations by the European Central Bank (ECB) that price pressures would eventually begin to build. Policymakers are preparing for a debate in the autumn about the future path of quantitative easing, which has helped reduce financing costs for firms and households, thus stimulating demand.
“The ECB expects solid, broad-based growth in the period ahead, and it’s pretty likely this will happen,” said Holger Sandte, chief European analyst at Nordea Markets in Copenhagen. “They will welcome these numbers but the focus will be on core inflation — whether it picks up and how fast.”
France enjoyed its strongest continuous expansion since 2011 in the 2Q, driven by exports and investment, while Spain experienced the fastest growth since 2015, national data published last week showed. The Austrian economy also gathered pace, while Belgium’s performance weakened.
One of the euro-area’s main challenges was highlighted in a separate report on manufacturing. While a Purchasing Managers’ Index pointed to broad-based economic growth, price pressures showed further signs of easing in July.
In a sign of confidence in Europe’s largest economy, unemployment in Germany continued to decline last month, data yesterday also showed. — Bloomberg