FRANKFURT (Germany), Jul 30: Europe’s economy enjoyed modest growth in the April-June quarter even as the US outperformed expectations, highlighting a persistent transatlantic growth gap with Germany, the leading European economy, remaining in the dumps and as hesitant consumers save more, rather than spend on new houses or cars.
Gross domestic product, the total output of goods and services, rose 0.3 per cent in the second quarter in the 20 countries that use the euro currency, according to official figures released on Tuesday by European Union statistics agency Eurostat.
Germany, the largest eurozone economy, slid back into contraction, recording a 0.1 per cent fall in output.
Tuesday’s figures follow a similar 0.3 per cent performance from the January-March quarter, the first significant growth after more than a year of stagnation just above, at, or below zero.
By contrast, the US economy grew 0.7 per cent in the second quarter from the first quarter, or 2.8 per cent on an annualised basis. US consumers are spending freely, while government spending from larger budget deficits and subsidies for business investment, in renewable energy under the Inflation Reduction Act and in semi-conductor production and infrastructure, are also contributing to US growth.
Those two trends are reversed in Europe where consumers are saving at record levels and governments have started restricting spending to reduce budget deficits. (AP)
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