Greece may hit euro area Q3 GDP

The Euro area quarterly GDP s.a stood at 0.4 qoq growth in Q2 is likely to post a sluggish growth rate in Q3. The Euro area economy is expected to grow at 0.3% quarter on quarter but Greece is likely to contract by 3.6% qoq in Q3, estimates, Societe Generale. 

A headline drop should not be too concerning. Away from Greece, lower fuel prices and better job creation, which have continued to boost disposable household income as well as corporate profit margins, have spurred the domestic demand-led recovery.Disposable household income and corporate profit margins are likely to increase with the fall in fuel price and increase in job creation. As a result, consumption demand will increase significantly. 

Therefore, Societe Generale estimates, France economy is likely to grow at 0.4%, Italt at 0.3% and Germany at 0.4% in Q3, which will be largely driven by consumer demand.