Skip to main content

Eurozone growth slows as trade tensions persist

Eurozone

BRUSSELS: Economic growth in the eurozone slowed in the second quarter, official data has shown, feeding concerns that global trade tensions fuelled by Washington may be hurting Europe’s economy.

Major economic institutions — including the European Central Bank and International Monetary Fund — have warned that growth in the eurozone risks taking a hit from the rising protectionism that stemmed from the “America First” policies of US President Donald Trump.

The fresh data released Tuesday confirmed the fears with growth in the 19-country single currency bloc hitting 0.3 percent in the April to June period, below the 0.4 percent in the previous quarter, the EU’s Eurostat statistics agency said.

On a year-to-year basis, economic growth in the eurozone reached 2.1 percent, which was far lower than the 2.5 percent in the previous quarter and also weaker than forecasts by analysts.

“Trade uncertainty seems to have already had a significant effect on the Eurozone economy in the second quarter,” said Bert Colijn, Senior Economist at ING bank.

“While the impact on real export growth has likely been small over the second quarter, the confidence factor has been more important,” he added.

European Central Bank chief Mario Draghi on Thursday already warned that “the threat of protectionism” remained a “prominent” risk to eurozone growth and warned that this year may not see a repeat of the bumper 2017.

IMF Chief Economist Maurice Obstfeld warned this month that “the risk that current trade tensions escalate further … is the greatest near-term threat to global growth”.

ECB caution

The data landed days after the European Union and US declared a trade war truce following White House talks, but analysts said the accord was fragile and that the spat could still weigh on growth.

Still, “the fact that the immediate risk of escalating trade tensions has diminished now should support growth throughout the second half of the year,” said Dirk Schumacher of Natixis bank.

The uncertainty over trade helped ECB governors last week decide to leave interest rates at historic lows even though they stuck to plans to halve “quantitative easing” or mass bond-buying from October before ending the stimulus scheme at the end of the year.

This came a month after the Italian banker surprised observers by announcing the ECB will wind down its massive stimulus programme faster than anticipated, before ending altogether it in December.

“We still see growth regaining some pace as the year goes on, but for now the continued slowdown will certainly keep the ECB in cautious mode,” said Jennifer McKeown of Capital Economics.

The caution will be put to the test by the inflation data also released on Tuesday that saw the ECB’s two percent target exceeded.

Eurostat said eurozone inflation accelerated in July to 2.1 percent driven by high energy prices. This was slightly faster than forecast by analysts.

Eurostat also said unemployment in the eurozone remained flat in June, at 8.3 percent.

Joblessness in the area has been falling steadily since it fell below the symbolic threshold of 10.0 percent in September 2016.

However, it is still higher than the average rate before the financial crisis, when it stood at 7.5 percent.

Among the 19 single currency countries, the lowest unemployment rates in May was recorded in Germany at 3.4 percent, according to Eurostat.

The highest rate was that of Greece with 20.2 percent in April, the latest available figure.

Crisis-hit Spain saw its rate fall to 15.2 percent.

Read More: France, Germany close to agreement on eurozone reform

The post Eurozone growth slows as trade tensions persist appeared first on ARYNEWS.

Comments

Popular posts from this blog

K-Electric fined Rs2 mn over weak power supply system

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday imposed a fine of Rs2 million on the K-Electric. According to a statement issued by the power regulatory authority, the K-Electric was penalized over non-compliance of performance standards, particularly its failure to restore power supply within the prescribed time frame and to ensure the safety of public in Karachi. Quoting media reports, it said large swathes of Karachi remained without electricity due to the tripping of almost 700 feeders during rainy weather in June last year, which resulted in long power blackouts ranging from 24 hours to 48 hours in almost 50% areas of Karachi. Further, there were also reports of fatal injuries to some people owing to electrocution. The Nepra took notice of the situation in Karachi and directed the K-Electric to immediately provide a detailed report on the tripping of feeders and electrocution incidents along with preventive and corrective steps taken by K-Elec...

10 creepy celebrity wax statues

Waxworks of celebrities, sports persons and politicians such as Tom Cruise, Barack Obama and Christiano Ronaldo are admired by people all over the world. The craft requires taking careful and accurate measurements to create these wax statues, which are then polished and perfected to make for an exact replica. Madame Tussaud’s is one of the most famous museums in the world that displays wax statues, however, not all wax museums in the world craft flawless statues. Compiled from Cosmopolitan India , here is a list of the creepiest celebrity wax statues. Barack Obama PHOTO: COSMOPOLITAN David and Victoria Beckham PHOTO: COSMOPOLITAN Jennifer Aniston PHOTO: COSMOPOLITAN Beyonce’s wax statue sparks outrage Jennifer Lopez PHOTO: COSMOPOLITAN Justin Bieber PHOTO: COSMOPOLITAN Justin Timberlake PHOTO: COSMOPOLITAN Aamir Khan PHOTO: COSMOPOLITAN Katrina Kaif PHOTO: COSMOPOLITAN London’s Tussauds gets to work on Trump wax figure Selena Gomez PHOTO: C...

Accountability court hears assets case against Ishaq Dar

ISLAMABAD: An accountability court in Islamabad on Wednesday resumed the hearing of a reference filed against former finance minister Ishaq Dar by the National Accountability Bureau (NAB) for allegedly accumulating assets beyond his known sources of income.  Judge Muhammad Bashir is recording the statement of a prosecution witness, Ishtiaq Ahmed. At the previous hearing, the accountability judge had reserved his verdict on an application filed by two co-accused seeking acquittal in the case. Naeem Mehmood and Mansoor Rizvi, who are directors of Dar’s companies, had filed the application requesting the judge to exonerate them from all charges for want of evidence. Qazi Misbah, the counsel for the two co-accused, contended the prosecution has failed to provide compelling evidence to prove the allegations leveled against his clients. The third co-accused President National Bank of Pakistan (NBP), Saeed Ahmed, had already filed an application before the court for his acquittal wh...