The euro zone economy grew better than expected in the second quarter of 2024, official data showed, confirming that the single currency bloc has been recovering since January despite a weak performance from Germany.
These figures would support the European Central Bank's view that there is no need to rush to cut interest rates further so soon after its June rate cut.
The EU's official data agency said the 20-nation single currency area grew 0.3 percent in the April-June period, beating economists' expectations.
Analysts surveyed by FactSet and Bloomberg had expected growth of 0.2%.
The eurozone is also expected to grow by 0.3% in the first quarter of this year and emerge from stagnation in the second half of 2023.
In the final six months of last year, the eurozone recorded zero percent growth.
While the better-than-expected growth will please many, concerns remain about Germany, Europe's largest economy, which has been weighing on the single currency zone's performance.
German production fell 0.1 percent in the second quarter.
“Overall, today's data confirms once again that Germany is the euro zone's growing laggard,” said Carsten Brzeski at ING Bank.
But he added: “While a recovery later this year is still possible, it is highly unlikely to be a strong one.”
But data released last week showed that euro zone business activity slowed further in July and manufacturing remained weak, raising warning signs for the European economy.
In contrast to Germany, the euro zone's second-largest economy, France, and fourth-largest, Spain, beat expectations, growing 0.3 percent and 0.8 percent respectively in the second quarter.
France is currently hosting the Olympics in Paris, which Capital Economics says should provide a “modest boost” to the eurozone economy in the third quarter of 2024.
In Spain, one of the region's strongest economic growth countries, exports and solid household spending drove economic growth, while a recovery in foreign trade and business investment boosted production in France.
Southern Europe appears to be faring better than other parts of the continent.
Italy and Portugal recorded growth of 0.2% and 0.1% respectively.
Tuesday's data also showed the European Union's 27-nation economy expanded 0.3 percent in the second quarter.
All eyes will be on euro zone inflation data for July due to be released on Wednesday, with consumer prices rising above the ECB's 2% target.
