France and Spain give euro zone economy a boost before outlook darkens
(Corrects first paragraph to show Spanish resilience, not German)
PARIS/MADRID (Reuters) — The French and Spanish economies displayed unexpected resilience in the second quarter but stagnation in powerhouse Germany pointed to renewed weakness ahead for the euro zone, as manufacturing ails and services slow.
France and Spain grew at a sustained pace on the back of stronger exports and tourism while Germany, the euro zone's biggest country, remained the worst-performing major economy in the bloc.
German gross domestic product stagnated in the second quarter after the economy fell into a mild recession in winter. It was mainly household consumption which helped avoid a longer recession.
Although there were some positive trends, German Economy Minister Robert Habeck said the figures were «anything but satisfactory.»
Weak purchasing power, thinned-out industrial order books, the impact of the most aggressive monetary policy tightening in decades, and the expected slowdown of the U.S. economy, all argue in favour of weak economic activity, said Carsten Brzeski, global head of macro at ING.
«We continue to see the German economy being stuck in the twilight zone between stagnation and recession,» Brzeski said.
Data from France and Spain, the bloc's second and forth largest economies, was more optimistic. France's gross domestic product expanded in the second quarter a faster-than-expected 0.5%, while the Spanish economy grew 0.4%.
French growth was driven by exports, boosted largely by the delivery of a cruise liner. In Spain, external demand, which includes foreign tourism, a pillar of the country's activity, led the growth.
«We see that for the first time, French growth is driven by exports, by corporate investment much
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