2019.09.0606:45:00UTC+00Eurozone GDP Growth Eases As Estimated In Q2

The euro area economy grew at a slower pace in the second quarter, as previously estimated, reflecting weak household spending and exports, and strengthened the call for stimulus from the European Central Bank.

Gross domestic product expanded 0.2 percent sequentially, following the first quarter's 0.4 percent expansion. The rate was in line with the estimate released on August 14.

Year-on-year economic growth eased to 1.2 percent from 1.3 percent. The second quarter growth was revised up slightly from 1.1 percent.

The expenditure-side breakdown of GDP showed that quarterly growth in household spending halved to 0.2 percent from 0.4 percent. Government spending gained 0.3 percent after rising 0.4 percent.

Meanwhile, gross fixed capital formation expanded at a faster pace of 0.5 percent, following the previous quarter's 0.2 percent increase. Exports remained flat on the quarter, while imports climbed 0.2 percent.

Further, data showed that the number of employed persons increased by 0.2 percent, after rising 0.4 percent a quarter ago. On a yearly basis, employment growth slowed to 1.2 percent from 1.4 percent.

According to the Purchasing Managers' survey, euro area private sector logged only a moderate growth in August as improvement in services activity was counteracted by contraction in manufacturing.

The timelier survey evidence suggests that the Eurozone economy will grow by around 0.2 percent sequentially in the third quarter, Jack Allen-Reynold, an economist at Capital Economics, said. Growth is likely to remain around that pace next year too, the economist added.