The euro zone economy stagnated in the second quarter of the year amid recession in Germany and Italy, according to European Union statistics agency figures released today.
The European Commission stuck to its forecast of a rise in activity later this year, although even its top range forecast for quarterly growth is just 0.6 per cent in the fourth quarter.
The euro zone's zero growth in the second quarter, based on data from four states, was in line with analysts' expectations. A quarterly contraction was prevented only by a rise in gross domestic product in Greece of 0.4 per cent.
With a fall in GDP of 0.1 per cent after a contraction in the first quarter of 0.2 per cent, Germany is in recession. Italy is in the same state, after its GDP shrunk 0.1 per cent in both of the first quarter. Other figures today showed deepening recession in the Dutch economy, which shrank a provisional 0.5 per cent in the second quarter, worse than expected.
On a annual basis, euro zone gross domestic product (GDP) was up 0.4 per cent in the second quarter after 0.9 per cent in the first three months of this year.
But the Commission expected growth later this year in the single currency bloc, which has consistently lagged the United States.
The Commission said the model it uses to forecast growth foresaw expansion of between 0 and 0.4 per cent in the third quarter, unchanged from a previous estimate, accelerating to between 0.2 and 0.6 per cent in the final three months.