Eurozone GDP falls in 2nd Quarter, Inflation dips 0.2% in July, stays at annual 4.0%. | CountingPips Forex Blog

August 14, 2008 - Forex Economic News

Eurozone GDP falls in 2nd Quarter, Inflation dips 0.2% in July, stays at annual 4.0%.

The Eurozone saw a contraction of its economy in the 2nd quarter of this year according to a news release by Eurostat today. The 15-nation eurozone gross domestic product declined by 0.2 percent in the April to June quarter following GDP growth of 0.7 percent in the first quarter. On an annual basis, the eurozone economy grew by 1.5 percent over last year's 2nd quarter following the 1st quarter's annual growth of 2.1 percent.

Economic forecasts were on Euro Forex News target with their predictions of a quarterly GDP fall of 0.2 percent and an annual growth rate of 2.1 percent. The contraction in GDP marks the first time since the beginning of the euro currency that the eurozone has had a quarterly contraction.

Germany, the eurozone's largest economy, saw a GDP decline of 0.5 percent in the 2nd quarter following GDP growth of 1.5 percent in the 1st quarter. Germany's annual rate of growth was 1.7 percent following 2.6 percent in the 1st quarter. France also saw their economy contract in the 2nd quarter as GDP fell by 0.3 percent after a revised gain of 0.4 percent in the 1st quarter. The annual rate of GDP growth in France, the eurozone's 2nd largest economy, showed an increase of 1.1 percent over last year and follows a 2.0 percent growth in the 1st quarter. France's GDP fell more than forecasts as expectations were for a 0.1 percent increase in the 2nd quarter and for a 1.6 percent rise on an annual basis.

Eurozone inflation dips 0.2% in July. Annual rate stays at 4%.

A separate report by Eurostat showed that annual inflation stayed the same last month as the month prior as transport costs and food continued to show increased prices. The eurozone consumer price index, a gauge of inflation, held steady in July at a 4.0 percent annual inflation rate matching June's data and coming in lower than forecasts expecting a 4.1 percent annual rate. Monthly changes in the cpi showed a decline of 0.2 percent in July after a rise of 0.4 percent in June and just surpassing forecasts expecting a monthly decline of 0.1 percent. Core inflation, excluding energy and food prices, registered an annual increase of 1.7 percent in July following a 1.8 percent rise in June. Transport costs, food and housing contributed to the annual increase in inflation as they have risen by 7.2 percent, 6.7 percent and 6.7 percent for the year, respectively.

Germany's consumer price index was also released today and showed a rise of 0.7 percent for July following a 0.6 percent rise in June. The annual increase of Germany's cpi was unchanged from June at 3.3 percent. Forecasts predicted a 0.6 percent monthly rise and an annual increase of 3.3 percent.

tags: forex, gdp, eurozone, germany, inflation, prices

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