Eurostat: Strong Q2 GDP but weaker outlook for H2?
Overview:
Q2 GDP data was strong both viewed on a q-o-q and y-o-y basis. Industrial output figures for June were more ambiguous. While the y-o-y expansion was still strong it was slightly weaker than in June and m-o-m data disappointed. Financial markets took both GDP and industrial production negatively, preferring to concentrate on the divergence between strong and weak economies with regards to the GDP data and fixating more on a negative m-o-m reading for the Euro area (and weakly positive one for the EU-27) rather than the still robust y-o-y data. It is not clear that anything substantive has changed however. M-o-m data is subject to large revisions. There will inevitably be divergences in growth as those economies that have become uncompetitive adjust. Indeed, a growth slowdown in H2 had always been expected.