Eurozone GDP Logs Growth In Q2

(RTTNews) - The euro area economy expanded as initially estimated in the second quarter despite tight credit conditions and high inflation damping demand. Gross domestic product registered a sequential growth of 0.3 percent after remaining unchanged in the first quarter, flash estimate from Eurostat showed Wednesday.

Year-on-year, economic growth eased to 0.6 percent from 1.1 percent. Both quarterly and annual growth rates matched the preliminary estimate released on July 31.

Capital Economics' economist Adrian Prettejohn said the economy is set to contract in the second half of this year as the effects of monetary tightening intensify.

The European Central Bank has tightened its monetary policy over the last nine consecutive sessions as inflation is projected to stay too high for too long. However, measures taken to contain inflation act as a drag on economic activity.

The Washington-based International Monetary Fund had forecast the economic growth in the currency bloc to weaken to 0.9 percent this year from 3.5 percent in 2022. The growth is set to improve to 1.5 percent next year, the lender said.

Regarding employment, official data showed Wednesday that the number of employed persons registered a quarterly growth of 0.2 percent but weaker than the first quarter's 0.5 percent increase.

On a yearly basis, employment growth slowed slightly to 1.5 percent from 1.6 percent in the first quarter.

Another data showed that industrial production expanded in June driven by the rebound in energy output. Industrial production increased 0.5 percent after staying flat in May.

By sectors, only energy output increased from May, up 0.5 percent. Intermediate goods production slid 0.9 percent and capital goods output decreased 0.7 percent.

Production of durable consumer goods and non-durable consumer goods decreased 0.1 percent and 1.1 percent, respectively. At the same time, the annual decline in industrial output halved to 1.2 percent from 2.5 percent in May. Nonetheless, this was the fourth consecutive fall in production.