Euro Area Economy Surprises with Strong Q2 Growth, Despite Geopolitical Uncertainty

The euro area economy grew by 0.4 percent quarter on quarter in the second quarter, exceeding expectations, according to data released by the European Commission.

Ireland was the growth leader among EU economies, with a GDP expansion of 3.9 percent quarter on quarter. However, its GDP growth is largely dependent on multinational corporations, which contracted by 7 percent in the first quarter.

Excluding Ireland, the eurozone GDP growth would have been 0.1 percentage points lower, according to Pantheon Macroeconomics.

The economic rebound appears to be broad-based in the EU, but divergence remains pronounced among European economies. Belgium and Austria stagnated in the second quarter, while others grew at different paces.