Euro-area economy grew more than estimated in second quarter

[FRANKFURT] The euro-area economy grew more than initially reported in the second quarter, driven by a surge in exports and consumer spending.

Gross domestic product rose 0.4 per cent in the three months through June after expanding a revised 0.5 per cent in the first quarter, the European Union's statistics office in Luxembourg said Tuesday. Household consumption increased 0.4 per cent. Eurostat had reported second-quarter growth of 0.3 per cent on Aug 14.

The European Central Bank predicted last week that the region's recovery will continue, albeit at a weaker pace as an economic slowdown in emerging markets including China weighs on global trade. Policy makers revised down their growth and inflation forecasts for the 19-nation bloc through 2017, and President Mario Draghi committed to expand stimulus if needed.

Government spending increased 0.3 per cent in the three months through June, while investment fell 0.5 per cent after a 1.4 per cent surge at the start of the year, according to the report. Household consumption contributed 0.2 percentage point to GDP, and net trade added 0.3 percentage point.

A gauge of factory and services activity rose to a four- year high in August in a sign that the euro area's recovery is proceeding at pace. Unemployment in the region declined to 10.9 per cent in July, the lowest since early 2012.

BLOOMBERG