GDP: Germany still in stalemate. France and Spain grow
The GDP of European countries confirms what many feel on their skin. Germany confirms that it is in a crisis that is turning into an economic deadlock, while the function of "European Driving" has passed to other countries, France and Spain which, however, being indebted, will not be able to continue this function for long, except do not change something in the various European regulations.
German GDP stalled in the second quarter of 2023 , below growth forecasts of 0.1%, and after a contraction in each of the previous two quarters that pushed the economy into a technical recession. Household spending has stabilized after the weak winter semester, according to flash estimates. If things go less badly for Germany, it is above all due to an audit
Data for Q1 2022 was revised up to -0.1% from -0.3% and for Q4 2022 to -0.4% from -0.5%.
Compared to the same quarter of the previous year, GDP contracted by 0.2%. In June, the Bundesbank expected the German economy to “swell slightly” in the second quarter, while it forecast a 0.3% decline for full-year 2023 followed by 1.2% growth in 2024 and 1. 3% in 2025.
Meanwhile, the IMF also sees GDP contracting by 0.3% this year, more than a 0.1% decline seen in April, as the manufacturing sector remains weak.
France grows. The French economy grew by 0.5% in the second quarter of 2023, accelerating strongly from a downwardly revised 0.1% increase in the first quarter and beating market forecasts of a 0.1% increase, it showed a preliminary estimate.
This was the strongest pace of expansion since the second quarter of 2022, as net trade contributed positively to GDP (0.7 percentage points versus 0.5 percentage points in the first quarter), with exports rising by 2. 6% (compared to -0.8% in the first quarter) while imports increased at a slower pace of 0.4%. % (against -2.0%).
In addition, fixed investment increased by 0.1% after contracting by 0.4% in the first quarter, mainly driven by higher investment in transportation equipment. At the same time, government spending remained flat, compared with a 0.2% decline in the first quarter.
Meanwhile, household consumption fell after previously flat on continued cost pressures and rising borrowing costs, with food spending declining for the sixth straight quarter while energy use has slowed down sharply .
Changes in inventories continued to hold back GDP (-0.1 percentage points compared to -0.3 percentage points). On an annual basis, the economy grew by 0.9% in the second quarter, at the same rate as in the first quarter.
The drop in energy consumption is interesting: how France can produce more while consuming less energy is a great mystery…
Spain is also growing, albeit less than France . The Spanish economy grew by 0.4% in the quarter in the April-June 2023 period, according to a preliminary estimate, which follows a downwardly revised expansion of 0.5% in the previous period and aligns with market expectations.
Household consumption increased by 1.6%, recovering from two consecutive periods of contraction, and fixed investment growth accelerated to 4.6% from 1.7% in the first quarter.
Additionally, government spending increased by 1.5%, recovering from a 1.6% decline. On the other hand, net external demand had a negative impact on GDP as exports plummeted by 4.1% and imports decreased at a lesser rate of 1.0%. On an annual basis, the economy grew by 1.8%, marking the weakest pace of expansion since a contraction was recorded in the first quarter of 2021
Continuing on this path, Spain risks having a trade balance problem, already negative, which risks becoming even more so
So it seems that, at least in recent quarters, we are witnessing a real paradigm shift in Europe, with Germany losing its status as an economic locomotive in favor of the Latinos France and Spain. The problem is that for these countries there is a public debt problem which is weighing down their growth due to European regulations which limit their economic policies. Sooner or later, this growth will slow down. Who will drag Europe at that point? Surely not us.
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The GDP article: Germany still in stalemate. Growing France and Spain comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/pil-la-germania-sempre-in-stallo-crescono-francia-e-spagna/ on Fri, 28 Jul 2023 10:22:51 +0000.