EuropeÃ¢â‚¬â„¢s economy expanded more than economists forecast in the second quarter as the fastest growth in Germany in two decades powered the regionÃ¢â‚¬â„¢s recovery.
Gross domestic product in the 16-nation euro area increased 1 percent from the first quarter, when it rose 0.2 percent, the European UnionÃ¢â‚¬â„¢s statistics office in Luxembourg said today. ThatÃ¢â‚¬â„¢s the fastest in four years and exceeded economists forecast for 0.7 percent growth, based on the median of 33 estimates in a Bloomberg News survey. Exports rose a seasonally adjusted 5.2 percent in June from May, a separate report showed.
Reviving global growth helped the euro-area economy gather strength after the Greek budget crisis forced governments to step up deficit-cutting measures. Germany, EuropeÃ¢â‚¬â„¢s largest economy, grew in the quarter at the fastest pace since reunification. The Stoxx 600 Index has gained 10 percent from an eight-month low in May, helped by a European backstop for indebted nations and the results of stress tests on banks.
Ã¢â‚¬Å“Germany is definitely the powerhouse of the euro area, driving the better-than-expected expansion,Ã¢â‚¬Â said Juergen Michels, chief euro-area economist at Citigroup Inc. in London. Still, Ã¢â‚¬Å“weÃ¢â‚¬â„¢re probably past the best in terms of economic recovery and will see weaker growth rates in the third and fourth quarters.Ã¢â‚¬Â
From a year earlier, euro-area GDP rose 1.7 percent after increasing 0.6 percent in the first quarter, todayÃ¢â‚¬â„¢s report showed.
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