Euro area economic output expanded faster than initially calculated in the second quarter, led by a surge in Irish multinational activity that lifted regional headline figures ahead of an upcoming European Central Bank policy decision. Eurostat revised real GDP growth for the currency bloc up to 0.6 percent quarter-on-quarter in its second estimate, following a preliminary reading of 0.4 percent. Growth across the wider European Union reached 0.7 percent on the quarter.
Multinationals drive revisions
The upward revision in euro area GDP was primarily driven by Ireland, where quarterly economic output surged 10.2 percent after a preliminary reported rate of 3.9 percent. Operations of multinational corporations, including Apple and Eli Lilly, accounted for the Irish growth. Net exports added 0.9 percentage points to euro area growth. Household consumption contributed 0.2 percentage points, while inventory changes subtracted 0.5 percentage points from the quarterly expansion.
Year-on-year growth reached 1.2 percent in the euro area and 1.4 percent across the European Union. In foreign exchange trading, EUR/USD was at $1.1623 by our market data. Market participants anticipate a 25 basis point rate increase at the next ECB meeting.
National performance disparities
Analysts including Daniel Hartmann at Bantleon expect euro area growth for the current year to reach 1 percent, outpacing the 0.8 percent forecast issued by the ECB in June. Hungary posted quarter-on-quarter growth of 0.5 percent, ranking 12th in the bloc. Over the past year, Hungarian GDP rose 1.7 percent, placing it 16th among European Union member states. Regional growth across Central Europe ranged between 1.5 percent and 2 percent.
Annual expansion diverged widely across Europe. Malta posted annual growth of 5 percent. Slovenia recorded 4.8 percent. Denmark expanded 4.6 percent. Poland, Lithuania, Cyprus, Sweden, and Latvia each met a 3 percent growth threshold over the past year, with Poland expanding at approximately 4 percent. Bulgaria recorded 2.8 percent growth, while the Romanian economy contracted 2 percent over the same period.
Related: Euro area producer prices rise 5.8 percent in July · Euro area inflation hits 3.3%, matching forecasts
Source: Eurostat | Data: Swissquote
