Eurozone: GDP stalls in Q2, slowdown driven by weaker domestic demand
September 3, 2014
In the second quarter, Eurozone GDP was unchanged over the previous period (Q1: +0.2% quarter-on-quarter). The result was in line with the flash estimate released by the statistical office (Eurostat) on 14 August and marked the slowest result in the last five quarters. On an annual basis, the economy expanded 0.7%, which was down from the 1.0% expansion recorded in the previous quarter.
The slowdown in Q2 was the result of weaker domestic demand, whereas the contribution from the external sector improved compared to Q1. Private consumption rose 0.3% over the previous quarter, which was up from the 0.2% increase recorded in Q1. However, government consumption increased only 0.2% over the prior quarter, contrasting the 0.7% drop recorded in Q1. The weakest result came from fixed investment, which contracted 0.3% over Q1 (Q2: +0.2% qoq), marking the first drop in five quarters. Overall, domestic demand contracted 0.1% compared to the previous quarter, which contrasted the 0.5% expansion recorded in Q1.
Exports of goods and services rose 0.5% over the previous quarter, which was up from the 0.1% increase recorded in Q1. Meanwhile, imports grew 0.3% (Q1: +0.3% qoq). Exports outpaced imports and thus the contribution of net exports to overall growth swung from minus 0.3 percentage points in Q1 to plus 0.1 percentage points.
Author: Armando Ciccarelli, Head of Data Solutions