Eurozone Q2 GDP gets a trade boost as growth accelerates to 0.6%

AI summary

<ul><li>Eurozone Q2 final GDP +0.6% vs +0.4% q/q second estimate</li><li>Prior (Q1) 0.0%</li></ul><p class="text-align-justify" style="text-align: justify;">The breakdownThe positive revision is definitely a welcome boost for euro area policymakers. That especially after the more stagnant momentum seen in Q1.</p><p class="text-align-justify" style="text-align: justify;">The annual growth of euro area GDP even increased to 1.2%, beating the second estimate of 1.0% as well; much better than 0.3% in Q1 too.</p><p class="text-align-justify" style="text-align: justify;">Looking at the details, trade was the dominant driver in adding 0.9% to euro area GDP growth. Household consumption helped a little by posting a 0.2% contribution, before being offset by a drag in investories - which subtracted 0.5% from Q2 GDP.</p><p class="text-align-justify" style="text-align: justify;">All in all, the Q2 rebound looks stronger on the surface than underneath. Growth was heavily driven by exports and net trade rather than a broad acceleration in domestic demand, while investment remained soft.</p><p></p><p class="text-align-justify" style="text-align: justify;">How does this compare to Q1 economic activity?Eurozone GDP was flat q/q in Q1, so the +0.4% expansion in Q2 marks a clear pickup in economic activity.</p><p class="text-align-justify" style="text-align: justify;">What drove the improvement in economic performance?The recovery was broad but uneven. Spain (+0.7%) remained one of the stronger