Complete data confirms steady growth in Q2
The third estimate of GDP for the second quarter released by Eurostat confirmed that soft momentum at the start of the year carried over into the second quarter. GDP increased a seasonally-adjusted 0.4% in Q2 over the previous quarter, matching Q1’s result but notably below the vigorous 0.7% growth seen throughout most of 2017. The result matched the second preliminary estimate.
Internal dynamics were mixed in the second quarter, largely driving the unchanged growth reading. Private consumption growth lost steam, while fixed investment picked up. Private consumption expanded 0.2% quarter-on-quarter in Q2 (Q1: +0.5% quarter-on-quarter), as rising inflation and lower sentiment weighed on consumption. However, fixed investment expanded a solid 1.2%, up notably from Q1’s 0.3% increase and helped by easy credit conditions.
Meanwhile, the external sector continued to drag on activity in the second quarter. Exports increased 0.6% over the previous quarter, contrasting Q1’s 0.7% contraction likely aided by a weaker euro. Import growth, however, also gained steam, rising 1.1% (Q1: -0.3% qoq).
On an annual basis, GDP growth in the Euro area edged down to 2.1% in Q2, below Q1’s 2.4%.