Eurozone economy grows at double the pace of the UK in second quarter

 
Jasper Jolly
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Even the Greek economy has shown positive signs in the last few months (Source: Getty)

The Eurozone economy accelerated in the second quarter of this year as the continuing recovery in the single currency bloc takes hold.

GDP growth grew by 0.6 per cent in the three months to June, up from 0.5 per cent in the first quarter of 2017, according to preliminary estimates published today by the European Commission.

That means Eurozone output grew twice as fast as the UK in the second quarter, despite a small pick-up in growth in the British economy.

Read more: Eurozone unemployment falls to lowest since February 2009

Over the course of the year to June output expanded by 2.1 per cent in the Eurozone.

While the European Commission does not break down its preliminary estimates by country, one of the strongest performers was the Spanish economy, which grew by 0.9 per cent quarter-on-quarter, according to government statistics.

The Eurozone has been cheered in recent months by growing evidence of momentum in the economy, after a spate of anti-EU candidates were defeated in legislative elections. Foremost among these was the victory of Emmanuel Macron as President of France, which has provided a new impetus for a renewed push for economic and banking union.

Read more: Eurozone inflation "not quite there yet" for tightening says ECB official

At the same time unemployment has continued to fall steadily to levels not seen since the global financial crisis, with the latest figures showing the rate at 9.1 per cent.

However, challenges for the bloc remain, with a continued reliance on loose monetary policy underpinning growth and wage growth still stubbornly stagnant, despite gains in employment.

Meanwhile a full recovery in Greece remains distant, even with positive signs from a successful bond issue last week.

“The outlook seems more encouraging than it has been for almost a decade,” said Florian Hense, an economist at Berenberg bank. “Although serious risks remain, the Eurozone looks set to enjoy resilient growth at around two per cent and low inflation – a Goldilocks era dawns on the Eurozone.”

Read more: Eurozone consumers and businesses are still loving the economic recovery

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