Economic growth in the euro zone was significantly better than expected in the second quarter, at 0.7% compared to the previous quarter, while inflation hit a new record high in July at 8.9% year-on-year, it announced. this Friday Eurostat.
If the war in Ukraine continues to drive up prices in the 19 countries that share the single currency, it has not yet stalled the economy. After GDP growth of 0.5% from January to March, economists had expected a sharp slowdown. But the activity was driven by the good performance of tourism services thanks to the lifting of restrictions linked to the pandemic.
“Good news! The euro zone economy exceeded expectations in the second quarter,” European Commissioner for Economy Paolo Gentiloni rejoiced on Twitter. But he warned that the rest of the year could be more difficult. “Uncertainty remains high for the coming quarters: we must maintain unity and be prepared to respond if necessary to a changing situation,” he commented.
Contrasting situation in Europe
With an increase of 0.7% compared to the first quarter, or +4% compared to the second quarter of last year, the gross domestic product of the euro zone exceeded that of the United States in April-June. US GDP contracted 0.9% at an annualized rate, after already falling 1.6% in the first quarter. Within the European bloc, the situation is mixed. Growth was strong in Spain (1.1%), Italy (1%) and France (0.5%). But Germany, Europe’s largest economy, stagnated (0%).
Eurozone inflation was pushed to a new high by the war in Ukraine and Western sanctions against Moscow, to 8.9% in July, from 8.6% in June. This indicator has reached a new high every month since November. In addition to skyrocketing energy prices (fuel, gas, electricity), European households are increasingly facing skyrocketing food prices.
Among the components of inflation, energy continued to experience the largest annual increase, although it slowed down, with 39.7% (compared to 42% in June). Food prices (including alcohol and tobacco) rose 9.8%, after 8.9% in June. Those of industrial goods and services increased in July by 4.5% and 3.7% respectively, slightly above the previous month. The lowest inflation was recorded in France (6.8%) and Malta (6.5%) in July. The Baltic countries had the highest rates: 22.7% in Estonia, 21% in Latvia, 20.8% in Lithuania.
Source: BFM TV
