Eurozone Q2 GDP up 0.3%... Germany down 0.1%

While the Eurozone (20 countries using the euro) GDP grew by 0.3% in the second quarter compared to the previous quarter, pessimism about the economy of Germany, the largest economy, is rising.

On the 30th (local time), the German Federal Statistical Office announced that Germany's gross domestic product (GDP) for the second quarter of this year was preliminarily estimated to have decreased by 0.1% compared to the previous quarter.

[Image source=Reuters Yonhap News]

The second quarter GDP decreased by 0.1% compared to the same period last year.

The statistical office explained that investments in equipment and construction sectors declined in the second quarter.

Germany's economy, which contracted by 0.4% in the fourth quarter of last year, showed signs of recovery with a 0.2% increase in the first quarter of this year but declined again.

The German government forecasts economic growth of 0.3% this year and 1.0% next year. However, recently, pessimism about the economy has been increasing, suggesting that achieving these targets may be difficult.

The ifo Business Climate Index, a representative leading economic indicator, rebounded after January this year but fell for three consecutive months from May, recording 87.0 in July. Klaus Wohlrabe, head of research at the ifo Institute, stated, "The German economy is in crisis. There is little hope for improvement in the third quarter."

On the same day, the European Union (EU) statistical office announced that the Eurozone's GDP for the second quarter was preliminarily estimated to have grown by 0.3% compared to the previous quarter. This exceeds experts' forecast of a 0.2% increase.

The Eurozone experienced technical recession with negative growth rates for three consecutive quarters from the third quarter of last year.

Bert Colijn, ING's chief Eurozone economist, said, "This shows that after a recession throughout 2023, the economy has cautiously begun to recover," but added, "Recent data does not provide strong confidence that the Eurozone economy will accelerate its recovery."

Bloomberg reported that major countries such as Spain (0.8%), France (0.3%), and Italy (0.2%) maintained growth following the first quarter, offsetting Germany's negative growth.

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