Should we lower our eurozone expectations?

Following six consecutive months of contraction, the eurozone successfully returned to growth in Q2 this year, with GDP increasing at a better-than-expected rate of +0.3% quarter-on-quarter (QoQ).

Bearing in mind other recently-improved economic indicators, several commentators have concluded that a true economic recovery in the eurozone is on its way. This idea of a clear economic rebound, however, stands on shaky legs. In fact, temporary factors can explain a substantial part of the growth – particularly in the eurozone’s two biggest economies. Germany’s growth (+0.7% QoQ) can be attributed to a weather-related boost in construction activity, while France’s (+0.5% QoQ) was driven by a build-up in business inventories. Furthermore, Italy, Spain and the Netherlands – togethe...