In its monthly conjuncture flash, which looks at the state of the Luxembourg economy as a part of the euro zone, Statec has noted contrasting trends in the euro zone’s three biggest economies.

According to Statec, “Germany delivered a pleasant surprise, with 0.5% growth over one quarter, higher than suggested by the negative signals coming from German entrepreneurs and disappointing industrial output results.”

It continued that, “Germany is rightly concerned about the tensions weighing on global trade because its exports have made a huge contribution to its expansion in recent years. However, in the 2nd quarter, German domestic demand seems to have been the main driver, boosted by private and public consumption spending and by the resilience of the construction sector.” 

The results for France and Italy were more disappointing, the national statistics agency said, noting GDP growth just 0.2% over one quarter. 

“France, where growth had already slowed significantly in the 1st quarter (also +0.2%), is in a downturn. Household consumption has suffered from a number of tax measures which, combined with energy price hikes, weighed on purchasing power.”

As for Italy, post-electoral uncertainties are being felt. However, despite the slowdown over the first half of 2018, most economic markers in the euro zone remain solid. 

“Confidence indicators for businesses and households have fallen somewhat but remain above their long-term average. GDP growth will certainly be lower this year than last year, but the end of the expansionary cycle is not yet in sight.”