Despite Germany’s poor performance, official data released on Tuesday indicated that the eurozone economy grew faster than anticipated in the second quarter of 2024. This confirms the recovery of the single currency area since January.
The data will probably back up the European Central Bank’s assessment that, following a rate cut in June, there is no need to rush into further interest rate reductions.
This comes after the eurozone, which had stagnated in the second half of 2023, grew by 0.3% in the first quarter of this year.
During the last half of the year, the eurozone experienced a growth of 0%. Many will be happy with the better-than-expected growth, but the performance of the single currency area is still being affected by worries about Germany, the largest economy in Europe.
Overall, today’s data reaffirms that Germany is the eurozone’s growth laggard, according to Carsten Brzeski of ING Bank. It is implausible that there will be a significant rebound in the second half of the year, he said, but one is still possible.
However, data released last week revealed that business activity in the eurozone slowed down even more in July, with the manufacturing sector continuing to show persistent weakness. This is concerning news for the European economy.
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