Eurozone recovery takes a knock as economy grows just 0.2% in last quarter, with many countries disappointing
Latest: Euro growth misses forecastsSummary: the key dataBad news for France as growth stalls in Q1Germany beats forecasts with 0.8% growth10.47am BST
Ahha! This chart, from the brighter sparks at MacroPolis shows how Greece's economy may have clawed its way back to stagnation.
#Greece non-seasonally adjusted Q1 GDP -1.1% YoY from -2.3% in Q4 2013 (ELSTAT). #economy #troika #euro pic.twitter.com/HUWxa0DMkz
10.41am BST
The wider European Union grew by +0.3% during the first quarter, beating the eurozone's +0.2% growth.
Strong growth in the UK (+0.8%), Hungary and Poland (both 1.1% q-on-q) helped the EU outpace the euro area.
10.35am BST
Greece's economy has contracted by around a fifth since the crisis began, and is currently 1.1% smaller than a year ago. Here's a chart from Trading Economics showing the details:
10.27am BST
Cyprus continued to suffer from its austerity programme, and the trauma of last year's bailout crisis which left its banking sector on the mat.
The Cypriot economy shrank by 0.7% during the last quarter, and is now 4.1% smaller than a year ago.
10.21am BST
Is there a glimmer of hope in Greece's GDP data, just released?
Greece's economy has shrunk by 1.1% over the last year, which is the smallest annual contraction since the debt crisis began in 2010. That's also less severe than the 1.5% slump which economists expected.
10.19am BST
The #Eurocrisis is over .... Long live the #Eurocrisis ...
10.19am BST
Not only is Europe struggling to grow, its inflation rate is worrying low.
Eurostat reports that prices rose by just 0.7% across the euro area in April, which confirmed its flash estimate. That's well shy of the European Central Bank's target of just below 2% .
10.13am BST
After all the optimism the eurozone's growth for the first quarter came in at a tepid 0.2%- much lower than the expected 0.4%. #eurozone
10.12am BST
EZ GDP +0.2% on the quarter is a real disappointment. Germany and Spain did well. Netherlands, France, Italy, Portugal did not.
10.05am BST
So, just to recap, the #euro zone is now in a low growth, negligible inflation environment. Is that stagnation already?
10.02am BST
BAD NEWS: The Eurozone grew by just 0.2% in the first three months of this year, dragged down by stagnation in France, and contraction in Italy, Portugal and the Netherlands (see earlier summary).
That's much weaker than the 0.4% growth that analysts had expected, and raises fresh fears that the eurozone recovery is running out of steam.
9.54am BST
Time for a very brisk recap before we get the overall figure for Eurozone GDP at 10am sharp (and updated inflation data too):
And the big picture is that the eurozone recovery story has taken a battering this morning with only Germany outperforming in the first three months of 2014.
The euro zone "recovery": Italy's Q1 GDP -0.1%, Netherlands -1.4%, France stagnates, Finland in recession.
guys, you'll never believe this but today's GDP numbers say Euro recovery really only working for Germans.
9.43am BST
And now we get bad news from Portugal -- its GDP fell by 0.7% in the first three months of this year, dashing hopes that it would keep expanding.
It's one disappointment after another.... apart from Germany
*PORTUGAL'S ECONOMY CONTRACTS 0.7% IN 1Q VS PRIOR QUARTER - another 'recovery' there for you
Portugal Q1 GDP comes in at -0.7% exp 0.1%
9.36am BST
Finland has also added to the gloom in the eurozone, sliding into recession with a 0.4% drop in GDP in the first three months of this year.
That follows a 0.3% contraction in Q4, and economists are concerned that the once-healthy Finnish economy is on the slide.
"Zero growth from the full-year is starting to look like an achievement for the economy
"If the situation in Russia gets worse, it will become a year of contraction."
Finnish GDP -0.4% q/q in Q1 after 0.3% contraction in Q4/2014.Finnish economy is in another technical recession,and the outlook is not good.
9.28am BST
Andrew Balls, deputy chief investment officer at Pimco (and brother of the UK shadow chancellor) is discussing the eurozone GDP data on Bloomberg TV now.
9.23am BST
We also have decent growth data from Poland - the economy grew by 3.3% over the last year (I can't find quarter-on-quarter figures, sorry)
That's good, but not quite as good as Hungary's 3.5% annual growth (which I covered here)
This is the first time that #Hungary is growing faster than #Poland since mid-2005.
9.15am BST
This chart, from ISTAT, shows how the Italian economy is shrinking again (-0.1%) having grown by just 0.1% in October-December after shrinking for nine straight quarters.
9.07am BST
Ouch: Italy GDP Falls 0.1% in First Quarter; Median Forecast 0.2% Increase via @BloombergNews
9.05am BST
ITALY'S ECONOMY HAS CONTRACTED AGAIN.
Italian GDP fell by 0.1% in the first quarter of the year, dashing hopes of 0.2% growth.
Italy's GDP falls 0.1% in first quarter, from +0.1% in Q4 2013 (RT poll was a 0.2% rise)
9.00am BST
The euro has fallen this morning, as the weak French growth figures put more pressure on the ECB to act. It's dropped 0.3% to $1.3673
8.56am BST
Another gloomy statistics in the Dutch GDP report -- in the first quarter of 2014 there were 112 thousand employee jobs less than a year earlier.
But the Central Bureau of Statistics also struck a note of optimism, saying Netherlands' industrial base continued to recover.
8.47am BST
Germany's economy grew by 0.8% in Q1 double previous Q. Only underlines the contrast with France.
8.45am BST
Shocking figures from the Netherlands.
Its economy shrunk by 1.4% in the first three months of this year, much worse than the 0.0% which economists had expected. That means its economy has contracted by 0.5% since the first quarter of 2013.
#Netherlands This decline was heavily influenced by lower gas consumption and lower production and export of gas #GDP #ECB
8.31am BST
This chart (via Yannis Koutsomitis) shows how Germany has now posted its strongest period of growth since 2011, having grown by 0.8% in the last quarter.
8.27am BST
Germany's DAX stock index has just hit a new record high, as traders in Frankfurt react to the news that German growth beat forecasts in the last three months.
GERMANY'S DAX .GDAXI HITS ALL-TIME HIGH AT 9,810.29 POINTS - RTRS
DAX HITS FRESH INTRADAY RECORD HIGH ABOVE 9,800 ...more stimulus chat needed to get >10000. Come on "sources"! pic.twitter.com/Y4oHR2pSzy
8.20am BST
The Czech Republic has matched France's weak performance, with no growth at all in the last quarter.
That's actually better than expected -- economists had feared a 0.2% contraction, following strong growth in Q4 2013.
8.16am BST
Romania's economy appears to have slowed in January-March, with quarterly growth of just 0.1%.
But year on year, its economy has grown by 3.8%, ahead of forecasts (according to Reuters), thanks to strong exports.
8.13am BST
Hungary has beaten expectations with some healthy-looking GDP data. Its economy grew by 1.1% in the last quarter, and is 3.5% larger than a year ago.
The Central Statistics Office said the Hungarian construction and industry firms drove growth.
#Hungary's 1Q GDP rises 1.1% from 4Q 2013 and is up 3.5% from a year earlier, boosted by manufacturing and construction, stats office says.
8.07am BST
Austria's economy grew by just 0.3% in the first three months of 2014, weaker than the 0.5% expected.
And growth in the final quarter of 2013 has been revised up to +0.4%, from +0.3% initially.
8.05am BST
France's stagnation means it will be much harder for Paris to achieve its goal of 1% growth through 2014....
Another missed target for Hollande, who didn't manage to get unemployment falling by the end of 2013 either...
French GDP was flat in Q1, weaker than expected. Bad news for the French government and its 1% growth target for 2014. #France #GDP
7.59am BST
Readers are already having their say in the comments below (thanks, as ever, all of you). Please keep them coming .
Here's some early reaction:
Bad news for everyone, nobody should be gloating.
Countries usually return to growth eventually, that is just the cycle. Osborne is not really responsible for the UK's strong growth any more than he was really responsible for the earlier flat period.
France's current economic weakness is due not to socialism, but rather to vague and meandering non-leadership from Hollande (who seems more involved with his lovers than his country).
Not to mention that there were several presidents from the right beforehand who picked and chose what changes they wanted to make, and what they would leave for the next president to sort out.
It has happened in Germany, and it is happening again: conservative parties leaving reform of welfare systems, that are necessary because an underfinanced state won't be able to sustain thewelfare state through demographic change, to their left-wing opponents who are supposed by their voters not to make cuts to redistribution. It is a perfect tactics for the right because they reap the harvest twice: the left shoot themselves in the foot for the next election while making the unavoidable corrections to the system for the conservatives.
Or maybe Germany's strength is due to its corporate structure which requires union representation in every industry at every level from factory to country. So there is no asset stripping. Money goes into investment in training and research rather than into dividends
In 2008 the government upped taxes to subsidise keeping people in work. Unions agreed a 10% wage-cut but workers actually lost only 3% as taxpayer and employer made up the rest.
7.56am BST
There's lots more GDP data to come, including
7.52am BST
Antonio Garcia Pascual, chief eurozone economist at Barclays, says France's economy was dragged back by "very weak" business investment and household consumption during the last quarter.
7.38am BST
UK must now share 'fastest growing developed econ' crown with Germany. Gee. I wonder which will hold it longer? No. I really don't.
7.33am BST
Breaking away to the UK briefly, Carphone Warehouse and Dixons have agreed to merge and create a new high street giant.
The new company, called "Dixons Carphone plc", is designed to create "a leader in European consumer electricals, mobiles, connectivity and related services" (they say here)
"This is a new chapter for both businesses and we are energised and proud to be part of what will be another fantastic journey for consumers and shareholders."
Surely, in 2014, a merger would be a good excuse to get rid of the dated "Carphone" name...
7.22am BST
There is SOME good news for France, alongside its disappointing growth data. INSEE has revised last year's data, and concluded that the French economy was larger than it first thought in 2012.
This means last year's debt-to-GDP ratio has been cut to 91.8%, from 93.5%, while the public deficit was revised down to 4.2% from 4.3%. That makes it a little easier for Paris to meet the deficit targets agreed with Brussels.
7.15am BST
Credit Agricole's Frederik Ducrozet is also struck by the comparison between Europe's two largest economies.
France 0 - Germany 0.8% QoQ. Economics just like Football.
7.12am BST
Economist Shaun Richards flags up another worrying point in today's data -- French imports rose in the last quarter, while exports slowed down.
A bad combination for #France "Imports accelerated (+1.0% after +0.5%), while exports slowed (+0.3% after +1.6%)." #Euro #ECB
7.06am BST
The German finance ministry says the country's economy benefitted from a mild winter, and decent domestic demand.
7.02am BST
GERMANY beats forecasts - with growth of 0.8% in the first quarter of 2014. That's a little stronger than expected (economists expected +0.7%).
SUCH a contrast with France's stagnation....
7.00am BST
As well as that 0.5% slump in French household spending, INSEE also reports that capital spending dropped by 0.9% in the last quarter.
This chart from INSEE shows how inventories rose, suggesting companies stockpiled goods as demand wavered.
6.52am BST
Jonathan Ferro of Bloomberg sums France's (non) growth figures up:
The bar was low and still France disappoints.... GDP delivers 0%.
6.50am BST
So why couldn't the French economy grow in the last three months?
Dominique Barbet, an economist at BNP Paribas SA in Paris, tells Bloomberg that consumer spending (which fell 0.5%) dragged down the economy. He's concerned that France's growth prospects look rather modest.
Whats worrying beyond the first quarter is that the level of growth is weak. Theres no acceleration. We dont have the recovery that other countries are seeing.
6.47am BST
Eurozone GDP day has begun with bad news -- the French economy stagnated during the first three months of 2014 as consumer spending slumped.
INSEE reports that GDP was unchanged over the quarter, a new blow to Francois Hollande's already pummelled government.
*FRANCE GDP UNCHANGED IN 1Q; MEDIAN FORECAST 0.1% INCREASE
I don't suppose François Hollande or the Parti socialiste are going to like that very much. #GDP #eurozone
6.41am BST
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.
And we're heavily focused on the eurozone today, with the release of new growth data from across the region for the first three months of 2014.
Continue reading... |
| READ THE ORIGINAL POST AT www.theguardian.com |