Exports lead Euro area Q2 GDP growth

Euro area Q2 flash GDP recorded 0.3% q/q growth, after +0.4% q/q in Q1 15 is slightly below expectation. Most countries surprised to the downside, with the notable exception of Greece. In Germany, GDP rose 0.4% q/q, marginally below expectations of 0.5%, supported by solid exports. 

Net trade also was on the strong side in France (+0.3pp), but this was not enough to offset weaker-than-expected domestic demand: overall growth was flat in Q2 vs. expectations of +0.2% q/q. On the other hand, downside surprises in Italy and the Netherlands seem to have been driven by negative net trade, while domestic demand held firm. For the euro area as a whole, Eurostat does not provide any expenditure details at this stage. 

"Domestic demand was the main engine of growth (+0.3pp), although it slowed from Q1, as the boost from lower oil prices is fading and investment failed to gather momentum. Meanwhile, the net trade contribution turned positive again (+0.2pp, the first time since Q2 14), as euro weakness supported stronger exports and import growth remained stable", states Barclays.