Euro zone economic growth eased in the second quarter of the year to 0.3% from the previous three months but is set to gather steam over the rest of the year, official EU data released today show.
The second quarter result, a first estimate from the European Union's statistics agency Eurostat, marked a slowdown from the 0.5% growth recorded in the first quarter but was consistent with analysts' expectations. Compared to the second quarter of 2004, the euro zone economy chalked up growth of 1.2%.
The 25-nation EU also saw growth slow to 0.3% in the second quarter from the 0.5% booked in the first quarter. Over one year, the vast EU economy grew 1.3%in the second quarter.
The second quarter figures, which were based on results from a handful of countries, showed wide divergences in growth rates. Spain surged ahead with 0.9% quarterly growth while the Finnish economy shrank 1.2%as it slipped into recession. Germany, the euro zone's biggest economy, was in between the extremes with its economy stalling in the second quarter.
Looking ahead, the European Commission, the EU's executive arm, forecast that the euro area's economy would grow 0.2-0.6% in the third quarter and 0.4-0.8% in the final quarter of the year.
The commission said in a statement that the improved outlook for the fourth quarter was 'supported by the lagged effects of favourable exchange rate developments and an improved international environment'.
A recent stream of positive economic data from the euro zone has suggested the 12-nation bloc is on the road to stronger growth as activity picks up in the manufacturing and services sector thanks to a weaker euro and improving foreign demand.
