BRUSSELS – Economic growth in the eurozone slowed in the second quarter, official data showed on Tuesday, feeding concerns that global trade tensions fuelled by Washington may be hurting Europe’s economy.
Major economic institutions — including the European Central Bank and International Monetary Fund — have warned that growth in the eurozone risks taking a hit from the rising protectionism that stemmed from the “America First” policies of US President Donald Trump.
The fresh data confirmed the fears with growth in the 19-country single currency bloc hitting 0.3 percent in the April to June period, below the 0.4 percent in the previous quarter, the EU’s Eurostat statistics agency said.
On a year-to-year basis, economic growth in the eurozone reached 2.1 percent, which was far lower than the 2.5 percent in the previous quarter and also weaker than forecasts by analysts.
“Trade uncertainty seems to have already had a significant effect on the Eurozone economy in the second quarter,” said Bert Colijn, Senior Economist at ING bank.
“While the impact on real export growth has likely been small over the second quarter, the confidence factor has been more important,” he added.
European Central Bank chief Mario Draghi on Thursday already warned that “the threat of protectionism” remained a “prominent” risk to eurozone growth and warned that this year may not see a repeat of the bumper 2017.
IMF Chief Economist Maurice Obstfeld warned this month that “the risk that current trade tensions escalate further … is the greatest near-term threat to global growth”. (AFP)
