Euro Area consumption likely to have been the main engine of growth

The euro area GDP to grow by 0.4% qoq in Q2 2015. This would represent 1.3% qoq at an annualised rate, higher than the euro area GDP potential (1.0%). The cyclical recovery continued in Q2 with the same momentum as Q1, boosted by the strong performance in Germany (0.4% qoq), and a firm growth rate in Spain (1.0% qoq) and France (0.3% qoq).

Despite economic multipliers being lower than in the past, the euro area economy is being supported by QE, easing credit conditions, a structurally lower oil price, the weaker euro and a more neutral fiscal policy.

"This is the first estimate and the breakdown by expenditures is not available yet, the consumption is likely to have been the main engine of growth in Q2, as consumers began to feel the impact of the positives previously mentioned", says Societe Generale. 

Uncertainty surrounding Greece is expected, high debt burdens and average economic confidence to have capped investment growth. Moreover, net exports are likely to disappoint given the backdrop of a weak global economy.