Eurozone economy performs better than expected in Q2
The eurozone economy expanded marginally last quarter, performing better than expected in the face of uncertainty created by White House tariffs.
The gross domestic product (GDP) of the 20 nations that use the euro currency increased 0.1 per cent, according to Eurostat, exceeding analyst expectations of an unchanged reading.
Spain (+0.7 per cent), Portugal (+0.6 per cent), Estonia (+0.5 per cent) Hungary (+0.4 per cent) and France (+0.3 per cent) led the way in terms of quarterly growth.
Irish GDP was found to have fallen one per cent during the quarter following a 7.4 per cent surge in Q1 prior to 'Liberation Day' and the announcement of the Trump tariff regime.
Ireland was the largest drag on eurozone growth, while Germany and Italy's economies also contracted slightly (-0.1 per cent).
In the first quarter, eurozone GDP increased 0.6 per cent as US firms front-loaded exports in anticipation of tariffs.
On an annual basis, the eurozone economy grew 1.5 per cent and all countries' economies expanded, led by Ireland, where GDP increased 16.2 per cent.
Joe Neillis, economic adviser at Baker Tilly Ireland, said the outlook for the eurozone economy is mixed following the agreement of the EU-US trade deal.
"Inflation appears to have been tamed, and the European Central Bank’s culmination of interest rate cuts, taking the rate to two per cent, has given the Eurozone economy the opportunity to grow," said Neillis.
"Yet, growth forecasts are not strong and global trade frictions continue to cast a shadow over economic recovery. It remains to be seen how the US-EU trade deal will affect exports from the bloc.
Ireland was the largest drag on eurozone growth, while Germany and Italy's economies also contracted slightly (-0.1 per cent).
"The deal has dodged the harshest tariffs of EU goods, with threatened 30 per cent tariffs halved to 15 per cent, but this is still a considerable increase on pre-existing arrangements.
"Both the German Chancellor and French Prime Minister have heavily criticised the deal, and investors are betting on it hurting the Eurozone economy."
(Pic: Getty Images)
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