The eurozone finally looks to be emerging from its worst recession on record.
Tomorrow, preliminary second-quarter gross domestic product figures will show the currency bloc’s economy expanded 0.2 per cent compared with the first quarter, according to economists surveyed by Bloomberg. It would be the clearest indication yet that the worst peacetime economic upheaval since the Great Depression was over for the region. Improving business activity and sentiment is providing evidence that the eurozone’s tentative recovery has continued into July.
Eking out that level of growth in the April-June quarter puts the eurozone far behind its Group of Seven peers, with 0.6 per cent second-quarter growth in Japan and the UK. Such a contrast shows the fragile nature of any recovery in the euro area and the persistent divergence between member countries. In the periphery, governments are struggling to balance austerity measures with encouraging growth while the region’s locomotive, Germany, has steady but uninspiring expansion.