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Eurozone growth slowed slightly to 0.3% q/q in Q2, from 0.4% q/q in the two previous quarters. This slowdown can be attributed to the backlash in economic growth in France, the Netherlands and Austria. The modest rebound in German growth is also partly to blame. Spain, in contrast, continued to lead the pack. French growth was expected to slow after its strong Q1 performance. But the slowdown proved to be even stronger than expected, resulting in zero growth.
"This poor performance is due to the very negative contribution of inventory changes, which offsets the very positive contribution of net exports and the slightly positive contribution of domestic demand. This lull should prove temporary. It does not call into question the recovery, as feeble as it may be. Several economic support factors are still at work", says BNP Paribas.
