- Evelyn Herrmann, European economist at BNP Paribas SA
The Euro zone economy remained stagnant in the second quarter, as pickup in consumer spending and exports were offset by drops in investment spending and inventories coupled with an unusual large decline in construction. Eurostat confirmed its initial estimate of the economic activity in the June's quarter, which booked zero growth in output from the previous three-month period. That marked the second consecutive quarter of slowdown for the Euro bloc, and was a key factor behind the ECB's decision to provide additional stimulus to boost growth and inflation at its recent meeting. The Euro zone has been posting a mild quarterly growth steadily since the second quarter of 2013, when the region emerged from a painful recession over a year long. Over the same period a year ago, the economy's GDP added 0.3%. On an annual basis, the currency bloc posted a 0.7% increase on a seasonally adjusted basis, down from the 1.0% rise recorded in the first three months of the year.
However, some positive news came from Germany, where industrial output recorded its strongest performance in more than two years. German industrial production rose 1.9% from the June's reading of 0.4%, signalling that Europe's number one economy is headed for a third-quarter rebound. Economists, however, had forecasted a climb of 0.5%.
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