The latest batch of economic growth numbers corroborate a picture which we started to see last year, namely that the extent of the Eurozone recovery is widening. Germany is no longer the sole growth driver. Countries like Spain are catching up.
In the second quarter, the Spanish economy saw growth accelerating to an anual 3.1%, up from 3% in the first quarter, supporting predicitions that GDP could expand by at least 3% for the third year in a row.
In its ‘Chart of the Week’, Deutsche Asset Management highlighted that Germany “managed to sail through the difficult times during the Euro crisis” without much damage, while countries like Spain were badly hit.
“However, the – sometimes painful – measures taken by the Spanish government are paying off: Spain has been growing at a 3 percent per annum rate, and not only recently, but for more than three years in a row. Spain is the Eurozone’s fourth largest economy, so that helps, but it was not a game changer for the whole bloc.”
And there’s more, according to Deutsche Bank’s asset management arm:
“France also reported a decent growth number, now growing at a 1.8 percent rate for the past 4 quarters. Germany’s Q2 number has not been released so far, but taking its first quarter figures as a reference, France now seems to have surpassed Germany in terms of growth. And even Italy is recording growth rates above 1 percent.”
Adding the Netherlands as the fifth largest Eurozone economy into the mix, and ranking the countries according to economic performance over the last 4 quarters, Deutsche Asset Management says an interesting picture emerges. “The Netherlands and Spain are in the top spot, followed by France as number three. Germany ranks fourth, followed by Italy as number five.”
“Hence, Eurozone growth is no longer a “Germany only” story. The recovery has broadened remarkably, pushing aggregate Eurozone growth to now +2.1% for the past four quarters. This is good news,” Deutsche Asset Management concludes.