Poor quarter as euro industry flops in August

INDUSTRIAL output in France and Italy remained weak in August, with the chances of a boost to growth in the third quarter look increasingly muted.

France’s output rose 0.2 per cent from July, while Italy’s dropped by 0.3 per cent over the same period. Both countries are down on the year, falling by 2.9 and 4.6 per cent respectively when compared to the same month in 2012.

“The recovery clearly remains dependent on Germany,” said Jennifer McKeown of Capital Economics

“All in all, today’s data provide further evidence that the Eurozone is not rebalancing. Indeed, growth seems to be diverging further,” she added.

Despite a poor performance from industry in some of the larger countries in the Eurozone, embattled Greece confirmed a budget surplus in the first nine months of the year, making the achievement of its 2013 fiscal targets look likely.

Deputy finance minister Christos Staikouras expects that the country will end 2013 with a small surplus, equivalent to 0.2 per cent of GDP.

The country’s estimates are not directly comparable to those used by its Troika of international creditors.

Greek officials also announced another rise in the country’s crippling unemployment rate, which climbed from 27.5 per cent in June to 27.6 per cent in July.

Managing a budget surplus is one of the Greek government’s conditions for returning to issuing bonds on international markets.

The second condition is that the troubled economy returns to growth.