Figures released this morning show that the German economy, which has held together the chaotic eurozone during the last few years of financial strife, has grown just 0.3 percent over the last quarter.
Fuelled by domestic consumption and relatively strong exports, the rate is less than the 0.5 percent of the previous quarter, but more than the 0.2 percent predicted by leading economists to Reuters.
ABN Amro’s Aline Schuilling said they felt the figures won’t prevent the eurozone from contracting in the coming months. “We do not think that Germany on its own can keep the entire euro zone afloat. We expect total eurozone GDP to have contracted by around 0.4 percent on the second quarter, as severe fiscal austerity is pulling most economies into recession.”
In other data released on Tuesday, France was shown to have recorded zero growth during the last quarter. With Europe’s leading economies struggling to overcome the turmoil of the last few years, the next few months are set to see contraction throughout the region.
ING’s Carsten Brezeski told reporters: “The [German] economy remains the stronghold of the euro zone. However, another strong quarter merely glosses over the fact that even the stronghold has already caught the euro crisis virus.
“The safety net of richly filled order books and low inventories has become thinner very rapidly, not boding well for growth in the second half of the year.”