Recession is easing in the European Union, according to the latest official figures.
GDP is up 0.3% in the EU and the smaller eurozone for Q2 2013, says the report from Eurostat.
The figures are a real reverse on the figures for Q1 2013 – which was -0.3% for the eurozone and –0.1% for the EU.
Compared with Q2 2012, seasonally adjusted GDP fell by 0.7% in the eurozone and 0.2% in the EU in Q2 2013, after falling -1.1% and -0.7% respectively in the previous quarter.
During Q2 2013, GDP in the US expanded by 0.4% compared with Q1.
Although the figures are not regarded as brilliant by economists, they do mark the end of the longest recession in Europe since the inception of the eurozone.
Consumers spending again
The rise in GDP is far from universal across the continent – some countries like Germany and Finland – are showing faster growth, while periphery economies are still in the throes of austerity.
Italy and Spain remain mired in recession, although fellow debt crisis sufferer Portugal posted a remarkable 1.1% growth.
Eurostat issued flash estimates – headline growth figures without the supporting data to show the drivers behind the growth.
“GDP is expected to continue to rise across the eurozone,” said Schroders’ European Economist, Azad Zangana.
“Most of the growth will be focussed on nations that were not part of the sovereign debt crisis.”
It’s clear Germany and France, as the two largest single currency economies, are hauling the rest of the eurozone out of the economic doldrums.
One of the main reasons is people are opening their wallets and spending again – with cars and electrical appliances leading the way.
Germany posted a 0.7% GDP rise, while France showed a more reserved 0.5% increase.
Strong Europe is good for the global economy
“This is double the figure we expected at this stage, but it’s still fragile and precarious but something is happening with the economy,” said President Francois Hollande.
The darkest days of recession now look brighter for the developed economies of the west as the US, Britain and now the eurozone all post positive growth figures.
Improvements in Europe have two impacts on global growth.
Europe and China account for more than a third of the global economy, and improvements in both have a knock-on effect for the rest of the world as consumers start spending again.
For the world economy to improve, both these markets have to maintain growth, and while Europe has fired on dodgy cylinders of late, the future looks good.
An economically sound Europe is also good for the US, as so many of America’s big companies are global brands and derive a good deal of their revenues from European outlets.