European GDP uneven in Q2

European GDP disappointed somewhat rising 0.3%qoq in Q2, a tad below expectations of 0.4%. Among the largest countries, France stagnated after a downwardly revised 0.6%qoq in Q1, and Italy barely grew 0.2%qoq. Germany powerhouse was up only 0.4%. Nevertheless there were some positive surprises. Greek GDP was up 0.8%qoq, which may be due to households bringing consumption forward among expectations of capital controls (that turned out to be correct) and Spain grew a whopping 1%qoq, after an equally impressive 0.8%qoq in Q1.

In Portugal, GDP was up 0.4%qoq as in Q1, taking the carry-over effect for 2015 to 1.2%, i.e., the expected 2015 growth should GDP stagnate in the second half of the year. The Government expects GDP rgowth of 1.6% this year which is attainable even in GDP growth does not rise from here.

The unevenness of recovery together with recent currency developments (the yuan appreciation) should comfort the ECB that it can safely pursue its quantitative easing programme with little fear of strong inflationary pressures so far.