Europe’s economy expanded more than economists forecast in the second quarter as the fastest growth in Germany in two decades powered the region’s recovery.
Gross domestic product in the 16-nation euro area increased 1 percent from the first quarter, when it rose 0.2 percent, the European Union’s statistics office in Luxembourg said today. That’s the fastest in four years and exceeded economists forecast for 0.7 percent growth, based on the median of 33 estimates in a Bloomberg News survey. Exports rose a seasonally adjusted 5.2 percent in June from May, a separate report showed.
Reviving global growth helped the euro-area economy gather strength after the Greek budget crisis forced governments to step up deficit-cutting measures. Germany, Europe’s largest economy, grew in the quarter at the fastest pace since reunification. The Stoxx 600 Index has gained 10 percent from an eight-month low in May, helped by a European backstop for indebted nations and the results of stress tests on banks.
“Germany is definitely the powerhouse of the euro area, driving the better-than-expected expansion,” said Juergen Michels, chief euro-area economist at Citigroup Inc. in London. Still, “we’re probably past the best in terms of economic recovery and will see weaker growth rates in the third and fourth quarters.”
From a year earlier, euro-area GDP rose 1.7 percent after increasing 0.6 percent in the first quarter, today’s report showed.
Bloomberg