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European GDP Unexpectedly Disappoints As All "Big Three" Economies Miss Expectations
Define irony: in a quarter in which Greece was supposed to have been near death (at least according to the worst PMI print in history and of course, judging by the bank lines in front of the capital controlled institutions), yesterday we learned that Greek GDP surged relative to expectations rising by 0.8%, which was what analysts had expected but with a minus sign in front of it.
Then overnight, we got the rest of European GDP, including the big three: Germany, France and Italy. The results were nothing short of a big disappointment.
To wit: Germany Q2 GDP rose by 0.4%, below the 0.5% expected; Italy's GDP rose by 0.2%, also below the 0.3% expected, but the biggest surprise was France, which did not even rise, and Q2 GDP was unchanged, well below the 0.2% expected, and down substantially from the revised 0.7% GDP growth in Q1.
At the Euroarea level, the result was also a big negative surprise with Q3 GDP rising 0.3%, down from 0.4%, and below expectations. This was the worst GDP print since Q3 2014.
From Eurostat:
Seasonally adjusted GDP rose by 0.3% in the euro area1 (EA19) and by 0.4% in the EU281 during the second quarter of 2015, compared with the previous quarter, according to flash estimates2 published by Eurostat, the statistical office of the European Union. In the first quarter of 2015, GDP grew by 0.4% in both areas.
Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.2% in the euro area and by 1.6% in the EU28 in the second quarter of 2015, after +1.0% and +1.5% respectively in the previous quarter. During the second quarter of 2015, GDP in the United States increased by 0.6% compared with the previous quarter (after +0.2% in the first quarter of 2015). Compared with the same quarter of the previous year, GDP grew by 2.3% (after +2.9% in the previous quarter).
And the full breakdown:
From the WSJ:
The data also highlight the big divergences within the 19 countries sharing the euro, which threaten the region’s prospects for a sustained recovery.
Accelerating GDP growth in Germany was offset by weaker growth in Italy and the Netherlands, while the French economy stagnated.
German GDP growth quickened to 0.4% from 0.3% in the first quarter, falling short of economists’ forecasts of a 0.5% gain. That translates into an annualized rate of 1.8%, according to the country’s statistical agency, Destatis.
* * *
French Finance Minister Michel Sapin, commenting on the weak data, said the country’s economy can still grow enough by the end of the year to start bringing down unemployment and reach the official 1% 2015 GDP target, as the government previously forecast. To achieve that, Mr. Sapin said the government will stick to its policy of tax cuts for businesses, which has proved controversial with the left of the ruling Socialist party.
“We must stay the course,” Mr. Sapin said.
And if Europe strays the course, and GDP goes negative again for the triple or quadruple dip recession, we no longer keep track, then the ECB will have just the dry powder to boost Q€ even more. Which after China's devaluation, will be just what the ECB will need to do.
As for the surprising Greek GDP boost, take it as a one-time gift for becoming Germany's latest Mediterranean colony.
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When you have that much money leave the Greek banking system it's going to go somewhere. They're trading 1s and 0s in their bank accounts for hard assets of all descriptions.
I wouldn't look at this as an indication their economy has staged a meaningful or lasting turn-around. Plenty of pain left in front of them.
Bail in suckers!
They are trading hard assets alright but unfortunately they are buying cars instead of gold. By buying cars they are buying a depreciating asset which has sales tax as a major component and which will be subject to further tax each year according to Greek tax law.
And this is the reason why Greek GDP surprised everyone to the upside (car inspired GDP).
Enough to drive you insane particularly when they can't even afford to buy fuel.
The soft fascist, centrally planned bigotry of lowered expectations.
Part of the zio-tax the euros have to pay as part of the scheme to embargo Russia. Time for the euros to wake the f up and throw off the yoke of zionism.
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yeah, let the USA try to make EU fight with Russia....I can assure you that half of the people are already so furious that they would go to the side of Russia (against the USA). And the other half are silly cowards, who would run away with fear as soon as they would spot any Russian coming. After all, Russians have the reputation of the "scariest white people".
Especially here in Central Europe, everything is boiling. People are waking up and they keep blaming the USA more and more especially for floods of immigrants (caused by USA wars). I have already heard many people say that they would welcome Russia occupying EU, as they would at least "stop the floods of immigrants". Even one of the most anti-Russian countries, Poland, now has a growing pro-Russian movement. As for Germany, unlike its politicians, already more than half of Germans want to get closer to Russia, and only 19% of Germans would be willing to fight Russia even if it attacked a NATO state! Not to mention all those stupid sanctions, which are destroying EU economies and common people also blame the USA for this. In Italia, people welcome Putin with sings reading: "PUTIN, Save the world!"
As for Ukraine, the recent official report from the Ukranian army says that 8000 Ukranian troops ran to the Russian side. Russians say this number is much higher. And thousands and thousands of Ukrainians, who do not want to fight against Donbass (on behalf of the USA) continue to flee to Russia as well. There are already millions of Ukranians in Russia. Russians joke that perhaps now is the time to add Ukrainian as another official language in Russia.
“Lugansk People’s Militia: Another mobilization wave in Ukraine will lead to demographic catastrophe, as more people will leave Western Ukraine"
This all shows that Western oligarchs cannot force people to fight anymore. People will start running away, or even defecting to the "enemy" side in huge numbers.
Get to work Mr. Chairman.
Spain seems to be coming back to life.
trueism, amazing with the shakle of the euro
"the shakle (sic) of the euro"
How Paul Krugman of you.
Yeah, as an Spaniard I can tell you we're experiencing a big shift in our economy. However, keep in mind left-wing radicals are starting to rise in the voting polls. So, in summary, I don't know how long will this recovery will last.
Don't worry, the Spanish recovery is a clever set-up and will end soon. Fueled by excessive public spending of some 6% deficit on the BIP. Though in reality it is about double of that, but hiding this in unconsolidated debt, excluded from EDP definition. All tolerated by the Eurocrats who are shitting their pants.
is this the first world wide recession we are experiencing?
Thanks Paul K and the keynsian bastard you worship
could this morphine in to depression?
feeling a tad down, ha=lol=fuck off(comment), looser...
It's a grave situation no doubt.
Recession? Morphine?
Mario Draghi is your economy on morphine, thus, we are in year eight of the global depression, which, if history serves as a guide, will last at least another six years, or, whenever WWIII breaks into full gallop (it's already begun, just that nobody really wants to say so out loud).
If you haven't either:
a. hunkered down with guns, ammo, food, etc.
b. taken the low road and profited from the fraud
c. gone deeply into debt, because now, as you know, is the best time to buy anything
d. just said, "F it," and try to ignorre all the obvious signs of a coming collapse
you've missed the boat, so to speak, but, good news, there's still time.
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Iceland line 2 sir.
I don't know what the surprise is here. The Greeks (at least the ones with money) went on a spending spree in the face of bank freezes and bail ins. It should have been completely foreseeable. And it won't be a trend...
Yep, this is an excellent example too of the sort of statistics that fool suckers, without an understanding of the crackup boom that proceeded it Greece looks okay, I think we can expect some truly awful figures to come out next quarter, and then it will get worse.
And we all know that these numbers are made up and the real numbers are a lot worse.
Big fat fucking goobament - fuck off and go to hell.
Italy IS NOT one of the big three economies in Europe along with France and Germany; instead the correct answer is Great Britain/United Kingdom.
Just announce that QE will extend til 2020 and GDP WILL explode fer sure.