Eurozone economy slowed in Q2, in line with expectations

According to the preliminary estimates released on Friday, the Euro area recorded a tepid economic growth of 0.3 percent q/q in Q2 2016. The reading matched market expectations but halved the growth recorded in the previous quarter. Q1 GDP growth was at 0.6 percent q/q.

After the strong growth in the first quarter which was helped by some temporary factors like the mild winter weather, some pay-back in the second quarter was expected. On a yearly basis, euro zone GDP was up 1.6 percent, slightly less than the upwardly revised 1.7 percent recorded in the first quarter.

Jack Allen at Capital Economics says slowing growth has all but “put paid to suggestions” the eurozone is on course for a robust cyclical upswing after a strong start to the year.