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Eurozone economy slows down in Q2

The eurozone economy slowed down in the Q2 of this year, compared to the Q1, the European Union’s statistics bureau Eurostat estimated on Tuesday.

During the Q2, the gross domestic product grew by 0.3% quarter on quarter in the 13-nation bloc sharing the same currency euro, slowing down from 0.7% in the Q1. GDP growth dropped more sharply than expected in Germany and France, the two largest economies in the euro zone, with both slowing down from 0.5% to 0.3%. In Germany, exports remained strong but investment in the construction sector fell, while economic slowdown in France was mainly due to unsound business investment and increasing trade deficit.

Compared to a year ago, seasonally adjusted GDP grew by 2.5% in the euro zone, after 3.1% in the previous quarter. Economists said the economic slowdown may persuade the European Central Bank to have a second thought on its plan to raise the eurozone benchmark interest rate in September, while others expected the eurozone economy to gather strength in the H2 of this year. In the 27-nation EU, GDP growth also slowed to 0.5% quarter on quarter in the Q2 from 0.7% in the Q1.

In comparison, the US economy increased by 0.8% compared with the previous quarter, after 0.2% in the Q1. In Japan, the GDP grew by 0.1% in the Q2 of 2007, after 0.8% in the Q1. (