Eurostat: Growth in the "core" disappoints in Q2
Overview:
GDP growth was a little lower than expected in Q2, according to preliminary numbers, in both the Euro area and EU-27. A significant deceleration in growth had been anticipated compared to the unsustainably strong rate recorded in Q1. The main surprise in the numbers in fact was in the distribution of growth. There was some reversal of fortunes in the sense that some of the “core” countries that have led the economic recovery to date largely stagnated will some of the “periphery” fared less badly than had been feared. We should not get carried away by one quarter’s data. Germany continues to grow at a fairly robust y-o-y pace while many of the PIGS are still in recession. The more important issue is that headwinds to growth remain substantial: these include weaker global demand, fiscal tightening and a strong Euro.