EMU Flash GDP Runs a Tick Slower in Q2

EMU growth is a tick slower in Q2 2024 with a flash growth rate of 1.0%, down from 1.1% in Q1. Essentially, it’s an unchanged performance in the quarter at a slow one-percent annual rate.

The Q2 annualized quarterly pacer fails to slow in only two of the seven early GDP reporters in the table as Irish GDP ramps up to a 5.1% annual rate in Q2 from 2.8% in Q1 and French GDP steadies at 1.1%.

However, splitting EMU GDP into the four largest EMU economies (Germany, France, Italy, and Spain) vs. the rest, shows that the slowing is concentrated on the largest EMU economies. For them, growth slows on a weighted basis to a 0.8% pace in Q2 from 1.3% in Q1. The rest of the EMU is estimated to have flash growth at 2.0% in Q2 compared to 0.4% in Q1.

Over four quarters, the Q2 growth rates show EMU speeding up slightly to 0.6% in Q2 from 0.5% in Q1. The four largest EMU economies log growth of 0.8% in Q2, the same as in Q1, while growth in the rest of the EMU falls by 0.3% annualized compared to dropping at a 0.8% pace in Q1.

By country, the quarterly four-quarter growth rates slow in Belgium, France, and Portugal.

The annual four-quarter growth rates in Q2 show only Italy and Spain at a pace above their historic medians; however, Portugal is close with a 47.8 percentile standing. EMU growth has been stronger nearly three-quarters of the time. The four largest economies have been stronger nearly one-third of the time while the rest of the EMU has been stronger more often, about four-fifths of the time.

These ranking benchmarks help to establish a general relatively as a reference for the countries and the country groups as well as for the EMU. The median four-quarter growth among reporters at a 38-percentile standing is relatively stronger than the (weighted) EMU total. This is slightly surprising since four largest EMU economies log growth that ranks higher than for the rest of the EMU.

U.S. growth performance leaves the EMU and all its early reporters in the dust with the partial exception of Spain whose four-quarter growth rate of 2.9% is close to the U.S. at 3.1%. But the relative strength of U.S. growth is at its 73.9 percentile compared to Spain that has a stronger structural growth rate and logs growth only at a 56.5 percentile.

On balance, EMU growth in Q2 shows little shifting overall. However, German GDP growth logs another negative number marking its fourth negative quarterly result in the last seven quarters. No other early reporter has a decline in quarterly GDP in Q2. However, the Netherlands has not reported yet and it has been on a weak streak with a decline in GDP in Q1 and four declines in the last six quarters.