Germany and France will Drive Eurozone Out of Recession

This weekend, several comments from German and French officials confirmed that the two largest economies in the Eurozone grew in Q2 and will certainly drive Eurozone out of recession in Q3.

 

Concerning Germany, according to a government estimate, the economy probably expanded about 0.75%, a number that exceeds the 0.6% median of 46 economist estimates compiled by Bloomberg.

 

More from Bloomberg:

 

The Economy Ministry is predicting growth of about three-quarters of a percent, according to a person familiar with the forecast, who asked not to be identified because the projection is confidential. That exceeds the 0.6 percent median of 46 economist estimates compiled by Bloomberg. Germany’s Federal Statistics Office will release the data at 8 a.m. on Aug. 14.

 

Regarding France, yesterday, French finance minister, Pierre Moscovici, declared recession is over. Even if Moscovici does not reveal the second-quarter figure, this statement suggests that growth came back in Q2.

 

More from Moneynews:

 

France’s finance minister says the economy is out of recession, part of a campaign by the French government to convince the public that a turnaround is underway.
 
France’s gross domestic product shrank by 0.2 percent for the past two quarters — the technical definition for a recession — and data for the second quarter of the year won’t be published until Aug. 14. But Pierre Moscovici told Corse Matin newspaper in an interview published Saturday that the recession is over, without revealing the second-quarter figures.

 

In this context, it’s clear that Eurozone GDP will be positive in Q2 and it will pave the way for a technical recovery (two positive quarters) in Q3 to the extent that statistics have improved significantly since the end of June.