Euro zone economy shows resilience as second-quarter GDP beats expectations and inflation slips

Euro portion ostentation fell successful July, and caller maturation figures showed economical enactment picking up successful the 2nd 4th of this twelvemonth — bringing immoderate affirmative quality to the region.

Headline ostentation successful the euro country was 5.3% successful July, according to preliminary information released Monday, little than the 5.5% registered successful June. However, it remains good supra the European Central Bank's 2% people for the 20-member bloc.

The euro country has been battling precocious ostentation for the past year, starring the ECB to acquisition a afloat twelvemonth of consecutive complaint hikes successful an effort to bring prices down. Last week, the cardinal slope roseate rates by a 4th percent constituent erstwhile again, bringing its main involvement complaint to 3.75%.

Initially, overmuch of the terms pressures successful the euro country were coming from precocious vigor costs, but successful caller months nutrient prices person contributed the most. This month, food, intoxicant and baccy erstwhile again drove ostentation — prices rose by 10.8% in July, though this was little than successful erstwhile months.

The ostentation figures travel against a backdrop of antecedently moribund growth, with GDP (gross home product) stagnating successful the archetypal 4th of this year. However, a abstracted information merchandise connected Monday showed that maturation accelerated successful the 2nd quarter, expanding by 0.3% — higher than the 0.2% expected by analysts polled by Reuters.

Both France and Spain's economies proved comparatively resilient successful the 2nd quarter, with the erstwhile posting a GDP complaint of 0.5% and the second expanding by 0.4%.

Germany, however, proved weaker implicit the aforesaid three-month period, failing to station immoderate growth.

This is simply a breaking quality communicative and it is being updated.