Economic data released today shows that the Eurozone technically exited their 18 month long recession as GDP expanded by 0.3% in the second-quarter of 2013. Portugal expanded the most and grew 1.1%, followed by Germany and Finland which both expanded by 0.7%. France surprisingly managed a 0.5% growth rate.
Cyprus declined by 1.4% and was the worst performer in the Eurozone as well as EU. The Netherlands as well as Italy both contracted by 0.2% while Spain contracted by 0.1%. Those three countries are the potential next hotspot for the Eurozone. Data for Slovenia as well as Luxembourg and Malta were not available which points to potential issues which may flare up this year or early 2014. Greece and Ireland were also not available which is a bad sign after they already received heavy bailouts.
Non-Eurozone members were led by the Czech Republic as well as the UK which expanded 0.7% and 0.6% respectively as Latvia grew by 0.5%. Bulgaria and Sweden posted the biggest contraction with 0.1% each.
The Eurozone is the heart of the European Union which in turn is the world’s largest economy. The Eurozone has a total of 17 members. The EU expanded by 0.3% as well and is made up of 28 member countries.
Euro Stat, the EU’s official statistic office, reported the following expansions/contractions during the second-quarter of 2013:
Eurozone Members
- Austria: +0.2%
- Belgium: +0.1%
- Cyprus: -1.4%
- Estonia: +0.1%
- Finland +0.7%
- France: +0.5%
- Germany: +0.7%
- Greece: N/A
- Ireland: N/A
- Italy: -0.2%
- Luxembourg: N/A
- Malta: N/A
- Netherlands: -0.2%
- Portugal: +1.1%
- Slovakia: +0.3%
- Slovenia: N/A
- Spain: -0.1%
EU Only Members
- Bulgaria: -0.1%
- Croatia: N/A
- Czech Republic: +0.7%
- Denmark: N/A
- Hungary: + 0.1%
- Latvia: +0.5%
- Lithuania: +0.6%
- Poland: +0.4%
- Romania: +0.3%
- Sweden: -0.1%
- United Kingdom: +0.6%
The Eurozone as well as EU bother offer more attractive opportunities than the US does right now. The Euro continued to weaken across the board which further shows the disconnect between the economy as well as forex traders. Most forex traders fear the end or at least reduction of counter-productive stimulus packages and would prefer weaker data which borders perversion.
The stronger data was encouraging, but unless structural problems are addressed the gains could be temporary and not sustainable. The global economy in general hit a much softer stance and economic figure throughout 2013 should reflect that. Watch out for the Euro to correct slightly more before stabilizing and finishing 2013 on a much stronger note above 1.3700.
Written by Paxforex