ez second flash q2 gdp preview
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- EZ Q/Q Growth Seen Repeating First Estimate of 0.2pct

- Annual Growth Forecast To Match First Estimate of 1.1pct

- German GDP Contraction Could Result In Downward Revisions

- Date Due At 09.00 GMT on Wednesday, 14 August


Frankfurt, 12 August (LS NEWS) – Weaker German exports and industrial output in June threaten to further reduce the overall growth rate in the Eurozone and add credence to the European Central Bank’s July decision to shift to an easing bias.


Less than two weeks ago the European Union statistics office Eurostat said second-quarter Eurozone GDP growth fell to a quarterly rate of 0.2pct, and two polls of economists predicted the rate will remain the same for the second estimate due Wednesday.


But an expected contraction in Europe’s largest economy could effect downward revisions for the single-currency area as a whole. The first estimate of German GDP growth, due three hours before the Eurozone data (06.00 GMT) is expected to show a slight decline on the quarter.


“If German GDP growth turns out to be negative, chances are high that the EZ data will have to be revised downwards to 0.1pct,” ING Chief German Economist Carsten Brzeski said. (Read our LiveSquawk preview of the German GDP report here.)

Weaker EZ Data Followed ECB Warnings

Slowing economic and consumer price growth in the Eurozone have increased the likelihood the European Central Bank will cut rates in September and possibly introduce further monetary stimulus measures outlined last month.


Prior to the release of the first Eurozone growth estimate for the second quarter, ECB President Mario Draghi said the outlook for the Eurozone economy “is getting worse and worse,” adding that members of the bank’s governing council were unhappy with how inflation was developing in the single-currency area.


To counter the slowdown, the ECB announced a shift to an easing bias and said it was considering multiple options for increasing growth, including renewed quantitative easing.

Europe’s Big Four Bust

Quarterly growth data and projections from the four major Eurozone economies tells the story: Spain reported a decline to 0.5pct from 0.7pct; France said growth dropped to 0.2pct from 0.3pct; Italy announced flat growth, an increase from the -0.1pct last quarter; and the Bundesbank, Germany’s central bank, warned last month that Europe’s largest economy likely contracted in the April-June period.


--- Eric Culp

Twitter: @EricCulpLS

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