European economic ills are back in the financial headlines, as GDP numbers disappoint. I was enjoying not being gloomy, a little bit upbeat, reporting on steady economic upticks. This was supposed to be the turnaround year. How quickly that can change. We now know that the Eurozone economies (18 of them) collectively failed to grow in Q2.2014. You might like to know who and why.
Well the big, sad surprise is Germany (representing 30% of Eurozone GDP) going from an at least +0.2% GDP (Q1.2014) to really dismal -0.2% in Q2.2014, attributed to the Ukrainian crisis. And if this continues… The other bad boys on the block are the usual suspects; France's stagnation at 0.00% yet again in both Q1 and Q2.2014 (suspicious, anyone cooking these books?) as the Government languishes around doing nothing (count on President Holland for that) and our old friend Italy was at -0.1% in Q1.2014 and now with -0.2% in Q.2014 is technically in recession yet again, this is the 3rd time since 2008. Both countries lay the blame at the open door (can someone shut it?) of the European Central Bank (ECB), demanding substantial quantitative easing (QE please, please, please, look the Americans do it…)… So where is there some good news? Well look to the Netherlands +0.5%, Portugal and Spain +0.6%, for Greece the numbers are not available (hmmm sounds familiar) and Hungary at +0.8%. So you know where to go.
Now that number brings us to the UK who also enjoyed +0.8% growth in Q2.2014, where the annual GDP was revised upward to +3.2%. Hey that’s cheerful! Nice to end the summer on that +ve note as the UK has become, to the surprise of most everyone including itself, a star economic performer this year. The UK is currently experiencing consistent growth in construction and manufacturing, but especially in services. Unemployment is low <6% and the Bank of England has room to manoeuvre, which is great for the economy. So watch this space.
If you want the detailed numbers click here: http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-14082014-AP/EN/2-14082014-AP-EN.PDF