The euro area GDP data for 2024 Q2 show that southern European economies are growing the quickest in the bloc, with Spain in the lead, followed by France, Italy and Portugal. In contrast, Germany slipped into contractionary territory, in further evidence of the change of paradigm since the pandemic. For many years the region’s largest economy outperformed its peers but this picture has changed more recently, with Germany appearing to be the laggard and southern economies now consistently outperforming their northern peers. Manufacturing powerhouse Germany, whose previous growth model was dependent on growing demand from China and energy imports from Russia, is now suffering the effects of a weak manufacturing cycle, higher energy prices and a slowdown in the PRC. Equally, one might question the sustainability of growth in France and Italy, given that both countries are yet to fully withdraw the fiscal stimulus put in place during the pandemic. How long the current pattern holds is thus open for debate, but what is clear is that the answer will have significant consequences for Europe’s future growth trajectory.
Refresh this chart in your browser | Edit the chart in Datastream
The views expressed in this article are the views of the author, not necessarily those of LSEG.
____________________________________________________________
LSEG Datastream
Financial time series database which allows you to identify and examine trends, generate and test ideas and develop viewpoints on the market.
LSEG offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.
