EditorDespite the crisis in Greece and the situation in China, it was revealed that the 19 country Eurozone’s economy grew faster than previously estimated over the first half of the year. The growth is a good sign in a recently declining market as it indicates that the region managed to withstand the crisis in Greece. In rare revisions to its back data, the European Union’s statistics agency on Tuesday increased both the first and second quarter growth 0.1 percentage points to 0.5 per cent and 0.4 respectively. The quarterly expansion in the first three months of this year is also the highest rated since the year 2011.![Eurozone grows despite Greece crisis]( "Eurozone grows despite Greece crisis")
Although these numbers are encouraging, the figures still show that the Eurozone is lagging the US, which grew at a quarterly rate of 0.9 per cent. The countries within the Eurozone also showed certain trends. France, Europe’s second-; largest economy disappointed many by flat-lining in the second quarter. On the other hand, Spain recovery gained further momentum and registered a strong growth of 1 per cent. Italy also grew by 0.3 per cent following Germany, which grew at a strong 0.4 percent.
Other countries like Finland grew by 0.9 per cent and Greece also reported growth, even though the cash-strapped country appears to be headed for an exit from the Eurozone with an uncertain future of it. Due to the interventions from Germany and IMF, the figures also suggested that Greece, which is worth 2 per cent of the Eurozone economy, did not fall into recession in the first quarter. It was earlier thought that the country might go into recession but despite all odds it reported a growth rate of 0.1 per cent. The statistics agency revealed that the Eurozone economy was 1.5 per cent bigger in the second quarter than it had been the year before.
Jonathan Loynes, chief European economist at Capital Economics said,” the figures are obviously backward looking and don’t incorporate the latest deterioration in the outlook caused by external developments like the concerns over China, nor the recent rise of the euro.” He also thinks that the ECB will pull the trigger on further stimulus by December. A week earlier, the ECB president, Mario Draghi gave a big hint that the central bank is ready to give the Eurozone economy a bigger doze of stimulus of the turmoil in China starts to grow on weight and inflation.
Mohith Agadi
