According to Eurostat data, the Eurozone economy recorded moderate but stable growth in the second quarter of the year, while the trade surplus jumped sharply in September thanks to increased exports to the US.
Despite the turbulent global trade environment, the 20-member bloc has shown more resilience than expected. However, its growth rate remains subdued compared to its international rivals.
Economists do not see a strong catalyst that will create rapid momentum in the region.Growth 0.2% — Germany the weak link
The economy grew 0.2% on a quarterly basis, in line with the initial estimate at the end of October. The strong performance of France and Spain offset the stagnation in Germany, which has been weak for three years. Germany is unable to expand due to low production, weak exports, and limited private consumption.
Year-on-year growth was 1.4%, slightly exceeding the 1.3% expectation in the Reuters survey. The biggest contribution was again from Spain’s strong economic performance.
Exports to the US doubled the trade surplus
Separate data showed that the Eurozone’s trade surplus rose from €1.9 billion in September to €19.4 billion. Exports to the US increased faster than imports, despite tariffs that had previously suppressed demand. The overall trade surplus of the European Union with the US also increased from €6.5 billion in August to €22.2 billion; this figure was €18.5 billion in the same period last year. The main drivers of the surplus were sales of chemicals, pharmaceuticals and machinery. However, it is noted that this could be a one-off jump, as the pharmaceutical sector is a historically volatile sector due to the influence of global firms located in Ireland because of tax advantages.
Economists warn: “Don’t attach too much meaning to monthly data”
The surplus in September marks the highest level seen since March; In March, US firms increased their inventories before tariffs went into effect.
Economists warn that the results should be evaluated cautiously, noting that preloading and temporary factors frequently affect monthly trade data.
