Eurozone Economy Slows Down Considerably Over Q2

Growth across the Eurozone has halved over the period March to June 2007, according to official figures today, citing weaker corporate investment as the pivotal factor in the downturn.

The figures released today show a growth in the 13-nation Eurozone of 2.5% over the period on the year, which can be simplified to growth of 0.3% from last quarter.

The slowdown had been widely anticipated by analysts, off the back of widespread reports of falling investor confidence in Germany and France. With financial markets across the world in turmoil, and stock exchanges trading delicately even now, it is no surprise that corporate investment was down over the last quarter, prompting this slowdown.

The first quarter of 2007 saw the regional economy grow by 0.7%, before today’s growth of just 0.3%, which analysts predict is merely a temporary side effect of the world economic climate.

With stock markets now fitting back into some form of normal trading pattern, it could be proposed that investment should naturally return over the course of the coming months.

Investment in business throughout the Eurozone was down by 0.2% over the period after growth of 2% over the course of the first quarter. However, with markets across Europe affected by the fallout from the US economy, it’s understandable that economic growth should take a back seat.

Meanwhile, the European Central Bank is scheduled to meet this Thursday to discuss interest rate policy. With current market conditions, today’s announcement is set to further cement holding rates for the time being, to allow markets to settle down from the effects of macro-economic externalities.

In separate figures, the Eurozone economy benefited from strong exports in manufacturing and services, whilst imports remained modest through the majority of sectors, with internal EU trade accounting for domestic consumption.

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