Eurozone growth slows to 0.3% from 0.4%

GMT 10:46 2015 Friday ,14 August

Arab Today, arab today Eurozone growth slows to 0.3% from 0.4%

European Central Bank (ECB)
Brussels - AFP

Growth in the 19-nation eurozone slowed slightly in the second quarter to 0.3 percent, coming in at the bottom end of analyst forecasts, official data showed Friday.

The economy had expanded 0.4 percent in the three months to March, continuing a modest recovery. But recent data has shown inflation and unemployment little changed despite a massive European Central Bank stimulus programme.

Analysts had expected second quarter growth to come in at 0.3-0.4 percent.

Compared with second quarter of 2014, the economy grew 1.2 percent the Eurostat statistics agency said.

The full 28-member EU meanwhile gained 0.4 percent in the second quarter, and was up 1.6 percent compared with a year earlier.

The eurozone slowdown reflected a sharp reverse in France -- flat after a jump of 0.7 percent in the first quarter -- which was offset in part by a pick-up in Germany, Europe's powerhouse economy, to 0.4 percent from 0.3 percent.

Analysts at Capital Economics said the eurozone economy would likely continue bumping along, supported by Spain and Germany but with France unlikely to show much improvement.

Among the larger economies, Spain was one of the best performers with a gain of one percent in the second quarter, while Italy added just 0.2 percent.

"We suspect that growth in the region as a whole will slow further in the second half of the year as temporary boosts from a weaker euro and lower oil prices fade," analyst Jennifer McKeown said in a research note.

"This underlines the need for the ECB to maintain and perhaps extend its policy support."

The ECB has pledged to pump more than one trillion euros ($1.1 trillion) into the economy through September 2016 to boost demand and credit.

Data last month showed the July eurozone inflation rate unchanged at 0.2 percent while unemployment for June was also flat.

The inflation data has been a cause for concern as the figures directly reflect consumer demand and have fallen well short of the ECB's inflation target of just under two percent.

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