Eurozone GDP Dives in Q2, But CPI Increases in July
Yesterday we saw the USD Q2 GDP report being released. The economy dived hard during lock-downs, contracting by nearly 33%. That was the biggest decline ever in the US economy. The Eurozone economy also posted a major contraction for last quarter, but was a long way off the decline we saw in the US, while inflation is increasing this month.
Latest data released by Eurostat – 31 July 2020
- Q2 preliminary GDP QoQ -12.1% vs -12.1% expected
- Q1 GDP stood at -3.6%
- GDP YoY -15.0% vs -14.5% expected
- Prior GDP YoY -3.1%
The Eurozone economy posted a record slump in Q2, matching estimates as the impact of lockdown measures and the fallout from the virus outbreak is laid out for all to see. On a more positive note, inflation ticked higher and that will be the more important takeaway for ECB policymakers should the trend be able to be sustained towards the year-end.
Latest data released by Eurostat – 31 July 2020
- July preliminary CPI YoY +0.4% vs +0.2% expected
- June CPI YoY +0.3%
- Core CPI YoY +1.2% vs +0.8% expected
- June core CPI YoY +0.8%
Euro area inflation unexpectedly comes in at a beat and that is welcome news for policymakers for the time being. The bigger question of whether or not price pressures can improve amid the fallout from the virus crisis still remains but at least there is some positive takeaway in terms of data from Europe today after the doom and gloom Q2 GDP reports.
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