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Brussels - The eurozone economy grew less than forecast in the second quarter, held back by a sluggish performance in Germany and stagnation in France, data from the European statistics agency showed on Tuesday.
The Eurostat agency estimated gross domestic product (GDP) for the 17-country eurozone increased 0.2% in the three months to end-June from the previous quarter, compared with economists’ 0.3% growth forecasts. That was sharply off the rate of 0.8% in the first three months of the year.
Compared to the same quarter a year ago, Eurostat estimated GDP growth at 1.7%, compared to a year-on-year rate of 2.5% in the first quarter of 2011. Economists had forecast 1.8% for the second quarter.
A major contributor to the slowing growth was a German performance which suffered from a negative trade balance, flagging consumption and weak construction investment. German growth dropped to 0.1% in seasonally adjusted terms, from a revised 1.3% in the first three months of the year.
French figures last week showed the country's economy stagnated in the second quarter.
Germany, Europe’s largest economy, has been a star performer since the end of the 2008 financial crisis, and a sharp slowdown in its growth would have knock-on effects in other parts of the the eurozone.
The disappointing German growth figure knocked stocks lower and hit the euro, fuelling investor fears that the global economy is slowing more than expected.
The data sharpened the market focus on Tuesday’s meeting in Paris between French President Nicolas Sarkozy and German Chancellor Angela Merkel, with investors looking for any signs of new measures to contain the spreading eurozone debt crisis.
The Eurostat agency estimated gross domestic product (GDP) for the 17-country eurozone increased 0.2% in the three months to end-June from the previous quarter, compared with economists’ 0.3% growth forecasts. That was sharply off the rate of 0.8% in the first three months of the year.
Compared to the same quarter a year ago, Eurostat estimated GDP growth at 1.7%, compared to a year-on-year rate of 2.5% in the first quarter of 2011. Economists had forecast 1.8% for the second quarter.
A major contributor to the slowing growth was a German performance which suffered from a negative trade balance, flagging consumption and weak construction investment. German growth dropped to 0.1% in seasonally adjusted terms, from a revised 1.3% in the first three months of the year.
French figures last week showed the country's economy stagnated in the second quarter.
Germany, Europe’s largest economy, has been a star performer since the end of the 2008 financial crisis, and a sharp slowdown in its growth would have knock-on effects in other parts of the the eurozone.
The disappointing German growth figure knocked stocks lower and hit the euro, fuelling investor fears that the global economy is slowing more than expected.
The data sharpened the market focus on Tuesday’s meeting in Paris between French President Nicolas Sarkozy and German Chancellor Angela Merkel, with investors looking for any signs of new measures to contain the spreading eurozone debt crisis.
