The European Union maintained quarterly growth of 0.2% in the first quarter of 2014, nearly a full percentage point better than the loss posted in the same quarter the year before, and a German recovery from its small lull is in full effect. But that was the end of anything in the way of good news coming out of the EU’s statistical arm on Thursday.
Eurostat’s flash gross domestic product (GDP) estimates for the quarter disappointed massively, as growth was expected to be more the double the figure it reported. Hope had been returning on anecdotal evidence that the second and third largest economies on the euro currency, France and Italy, were showing real momentum. Both fell flat.
France showed no growth change between 2013’s fourth quarter and the most recent period. Even though France’s growth rate was up 0.6% from the same quarter one year ago, larger acceleration was anticipated since December, if not counted upon. Meanwhile, Italy posted a surprise quarterly retraction of 0.1% and an annual dip of 0.5%. A number of experts include New York University professor and Z-Score bankruptcy indicator creator Ed Altman, PhD, have predicted that the key to anything in the way of a sustained rebound was the sustained health of France and Italy.
There was also a surprise, 1.4% slowdown in the Netherlands, one of the few nations that showed some stability during the EU’s lengthy recession. The EU is considerably healthier than one year ago, but optimism had been increasing that the rebound might be a hot one, rather than an uneven ride.
- Brian Shappell, CBA, CICP, NACM staff writer