Euro-area exports increased for the first time in three months, led by a rebound in Germany, while inflation held steady at 1.6 percent as the economy gathers strength after the longest recession since the debut of the single currency.
Exports from the 17-nation bloc rose a seasonally adjusted 3 percent in June from May, when they dropped 2.6 percent, the European Union’s statistics office in Luxembourg said today. Shipments from Germany, Europe’s biggest economy, gained 6.3 percent, after a 9 percent decline the prior month. The euro-area inflation rate remained at 1.6 percent in July, a separate report showed.
Europe’s economy emerged from a record-long recession in the second quarter, expanding for the first time since 2011. Accelerating growth in the U.S., the world’s largest economy, and relative calm on financial markets have helped the euro area begin to recover. The European Central Bank has cut interest rates to a record low and pledged to keep them there or lower for an “extended period” to foster growth.
“The euro zone’s growth will mainly be driven by increased demand from the U.S. and emerging economies,” Moody’s Analytics said in an Aug. 15 report. “A slowdown in these markets is the main risk to the outlook, along with any deterioration in the euro zone’s internal situation.”
The euro was lower against the U.S. dollar after the data, trading at $1.3338 at 11:02 a.m. in Brussels, down 0.1 percent on the day. The Stoxx Europe 600 Index was 0.1 percent lower at 304.95.
Euro-zone imports increased 2.5 percent in June after a 2.1 percent decrease the prior month, and the trade surplus increased to 14.9 billion euros ($19.9 billion) from 13.8 billion euros.
Exports from France, the second-biggest euro-area economy, fell 1.7 percent, while Italian shipments rose 1.4 percent, today’s data showed. Spanish exports dropped 2.4 percent.
The 1.6 percent inflation rate matched an initial estimate on July 31. It is the sixth straight month that the rate has been less than the ECB’s 2 percent ceiling.
Gross domestic product in the euro area rose 0.3 percent in the April-June period after a 0.3 percent contraction in the previous three months, the statistics office said on Aug. 14. Germany and France both showed faster-than-projected expansions in the quarter. Still, the recession has pushed the unemployment rate to a record 12.1 percent and areas of southern Europe remain in a slump, with more than half of young people in Spain and Greece out of work.
“A subdued recovery remains the most likely scenario,” said Peter Vanden Houte, an economist at ING Bank NV in Brussels. “Confidence remains fragile.”
European companies are showing improved earnings for the second quarter. Henkel AG, the German maker of Fa soap and deodorant, reported second-quarter profit that beat estimates.
“We’ve seen double-digit growth in Brazil, India and China,” Chief Financial Officer Carsten Knobel said on Aug. 8. While Henkel saw continued weakness in southern Europe and Japan, growth is Russia was “strong,” he said.
Prada SpA, an Italian maker of $1,870 handbags, reported a 12 percent increase in first-half sales, boosted by growth in Asia. The luxury-goods industry is rebounding after a stuttering start to the year, with LVMH Moet Hennessy Louis Vuitton SA and Gucci-owner Kering SA last month reporting accelerating sales.