- Eurostat revises second-quarter growth to 0.4% from 0.3%
- Expansion driven by household consumption and exports
The euro-area economy grew more than initially reported in the second quarter, driven by a surge in exports and consumer spending.
Gross domestic product rose 0.4 percent in the three months through June after expanding a revised 0.5 percent in the first quarter, the European Union’s statistics office in Luxembourg said Tuesday. Household consumption increased 0.4 percent. Eurostat had reported second-quarter growth of 0.3 percent on Aug. 14.
The European Central Bank predicted last week that the region’s recovery will continue, albeit at a weaker pace as an economic slowdown in emerging markets including China weighs on global trade. Policy makers revised down their growth and inflation forecasts for the 19-nation bloc through 2017, and President Mario Draghi committed to expand stimulus if needed.
The data are “fairly encouraging,” said Timo Del Carpio, European economist at RBC Europe in London. “What the second-quarter figures are showing is a recovery that is maybe a bit more balanced than in the first quarter.”
With China jolting global markets by devaluing its currency, the euro area needs demand for its exports from countries such as the U.K. and the U.S., as well as from consumers and the public sector to drive growth.
Government spending increased 0.3 percent in the three months through June, while investment fell 0.5 percent after a 1.4 percent surge at the start of the year, according to the report. Household consumption contributed 0.2 percentage point to GDP, and net trade added 0.3 percentage point.
The euro was little changed at $1.1174 at 11:25 a.m. Frankfurt time.
A gauge of factory and services activity rose to a four-year high in August in a sign that the euro area’s recovery is proceeding at pace. Unemployment in the region declined to 10.9 percent in July, the lowest since early 2012.