A glut of euro zone GDP data is landing confirming a markedly poor second quarter for the currency area.
The mighty German economy has shrunk by 0.2 percent on the quarter, undercutting the Bundesbank’s forecast of stagnation. Foreign trade and investment were notable weak spots and the signs are they may not improve soon.
France has fared little better, flatlining again in the second quarter. That has forced the French government to confront reality, saying it would miss its deficit target again this year and cutting its 2014 forecast for 1 percent growth in half. There was no mention of the 2015 goal when France’s public deficit is due to come into line with the EU’s 3 percent of GDP cap, but Finance Minister Michel Sapin said Paris would cut its deficit “at an appropriate pace”.
We already know that Italy – the euro zone’s No. 3 economy – has slunk back into recession for the third time since 2008. Spain is the outlier, having reported healthy 0.6 percent quarterly growth. It’s unlikely any of its peers are going to better that.
The GDP figure for the whole of the euro zone is due later and forecast to show barely any growth, up just 0.1 percent. Given the way the national figures are coming in, even that looks over-optimistic.