The Euro Area GDP expanded a meagre 0.1% on quarter in the three months to June 2023, revised lower from initial estimates of a 0.3% gain. It follows a 0.1% growth in the previous quarter, revised higher from a flat reading. On the expenditure side, household consumption was stable, the same as in Q1, government expenditure rebounded (0.2% vs -0.6%) and gross fixed capital formation rose 0.3% (vs 0.3%). On the other hand, exports sank 0.7% (vs a flat reading) and imports were up 0.1% (vs -1.3%). In Q2, Germany, which is the Euro Area largest economy stalled, France expanded 0.5% and Spain grew 0.4% while Italy contracted 0.4%. The ECB expects the Euro Area economy to grow 0.9% in 2023 before rebounding to 1.5% in 2024 and 1.6% in 2025. However, concerns persist regarding the health of the bloc’s economy, and doubts are growing about its ability to avoid a recession, especially given the sluggish outlook for Germany.
