The Euro Area GDP contracted by 0.2% during the second quarter of 2012; this contraction in GDP came despite the slight growth in Germany’s economy by 0.3% and perhaps due to the decline in GDP in other leading countries such Italy and Spain. France’s GDP remained unchanged.
The contraction in the EU27 and EA17 by 0.2% during Q2 2012 came after their GDP remained unchanged during Q1 2012; in the last quarter of 2011 the EU contracted by 0.3%.
This new of Europe’s economy continues to dwindle isn’t good and could be another report that will bring the ECB to act on stimulating the economy by issuing a full scale quantitative easing plan, much like the one the FOMC issued in the past.
All awhile other leading countries are showing some signs of progress: as a comparison during the second quarter of 2012 the U.S GDP expanded by 1.5% (in annual terms), which is roughly 0.4% growth in (in Q-O-Q change). This growth rate is even a bit higher than Germany’s GDP growth rate.
Among the leading countries in the EU27 that led the rise in GDP in Q2 2012 were: Sweden (1.4%), Latvia (1%), Germany (0.3%), Romania (0.5%), Estonia (0.4%), and Slovakia (0.7%).
Among the top countries in the EU27 that led the decline in GDP in Q2 2012 were: Portugal (-1.2%), UK (-0.7%), Spain (-0.4%) and Italy (-0.7%).
France didn’t expand during the second quarter of 2012. This was the third consecutive quarter in which France’s GDP remained unchanged.
The chart blow presents the development of the quarterly growth rate of EU GDP in the past several years.
This news is likely to depreciate the Euro against the U.S dollar and other major currencies might follow. Furthermore, this news might contribute to the decline in energy commodities prices such as Brent oil prices, and precious metals such as gold and silver.
Euros to USD is currently traded up at 1.2361 a 0.23% increase as of 11:17*.
Current Nymex crude oil price, short term futures (September 2012 delivery) is traded up by 0.32% to $93.03 per barrel as of 11:17*.
Current gold price, short term futures (September 2012 delivery) is traded at $1,614.4 per t oz. a $1.8 increase as of 11:17*.
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