The growth figures have just been published throughout Europe for the second quarter of 2011. Unfortunately the numbers are not satisfactory and the austerity measures taken by the European governments might aggravate the situation. According to Eurostat, the growth in the second quarter of 2011 slowed and Euro Zone had only 0.2% growth in the second quarter which means 1.7% annual growth for the euro zone. These figures are much lower than the economists’ expectations.
German economy, the engine of European growth, slowed to 0.1% while the markets expected a 0.5% growth. This is the lowest growth since 2009.
Portuguese economy contracted by 0.9% year on year basis in the second quarter after having had a 0.6 percent decline year-on-year in the first quarter.
Spain’s economy grew only 0.2% compared to 0.3% in the first quarter. The economy grew by 0.7% year on year basis. Central Bank of Spain expects 0.8% growth for 2011 whereas the Spanish government anticipates more than 1.3% growth for 2011.
The Greek GDP declined at a 6.9 % annual rate between the second quarter of 2010 and 2011 Q2. This decline reached 8.1% in the first quarter of 2011.
Italian economy grew by 0.8% compared to the same period last year (year to year). According to Istat, Italy reported 0.3% growth with respect to the first three months (quarter to quarter).
The Bank of England reduced its growth forecast from 1.8% to 1.5% for 2011. The inflation is about to reach 5% this year but The Bank expects inflation to drop next year. The Bank also expects that the UK economy will grow by between 2 % and 3% for 2012.