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2nd LD-Writethru: Eurozone Q2 GDP growth confirmed at 0.3 pct

Xinhua, August 12, 2016 Adjust font size:

Flash estimate of the seasonally adjusted gross domestic product (GDP) rose by 0.3 percent in the 19-country euro area, unchanged from the preliminary flash estimate at the end of last month, Eurostat said on Friday.

The figure has fallen back from 0.6 percent in the first quarter of the year while GDP of the European Union (EU) as a whole expanded by 0.4 percent quarter-on-quarter.

Germany, the largest economy in the single currency zone, revealed a slightly stronger-than-expected 0.4 percent increase, while Spain at 0.7 percent and the Netherlands at 0.6 percent.

However, France and Italy recorded zero growth.

Italy's stagnation was well below economists' forecasts of 0.2 percent growth and marked a slowdown of growth from the previous quarter at 0.3 percent.

It contributed to slowing growth for the eurozone as a whole.

Germany's statistics office said growth in Germany came mainly from higher exports and falling imports. But business investment declined with little sign to recover despite low interest rates.

Capital Economics chief European economist Jonathan Loynes had earlier forecasted the weak Italian and the French data, raised the prospect of a revising down to the eurozone GDP figure.

"Looking ahead, some survey indicators have perked up a bit so far in Q3. But with growth still likely to be sluggish in the coming quarters and inflation pressures very weak, the ECB still has more work to do," Loynes noted.

Analysts said the weaker growth was strengthening expectations that the ECB would take additional stimulus measures later this year. Enditem