ECB policy is effective (“the transmission […] has never worked better than it...
Germany, Eurozone: 7 days of economics
Each week, the Economic Research Department of BNP Paribas reports on economic news.
- Strong start to the year for the German economy
- Eurozone GDP up 0.5% q/q
- Slowdown expected in the spring
The second raft of European growth figures confirms that most Eurozone countries saw good levels of economic activity in the first quarter. After strong GDP figures from Spain (+0.8% q/q) and France (+0.5% q/q) in late April, Germany this week announced sequential growth of 0.7% in Q1 2016. Like France's, Germany's economy was mainly supported by faster growth in domestic demand, consumer spending, investment, machinery and equipment, and construction. Growth also accelerated in the Netherlands (+0.5% q/q) and to a lesser extent Italy (+0.3% q/q). Overall, however, Eurozone GDP growth was 0.5% q/q, very slightly lower than the initial estimate. Growth figures are expected to show a slowdown in the second quarter of 2016. That is partly because Q1 figures were boosted by several temporary factors, including the upturn in French consumer spending after a dip following the terrorist attacks, and mild weather conditions benefiting Germany's construction sector. In addition, the monthly statistics we have seen (industrial production and retail sales) show that growth has weakened in Q2. Nevertheless, this week's figures are good news overall, showing – for a change – growth that is much stronger in Europe than in the USA, where the economy did grow 0.5% in Q1, but on an annualised basis.
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