Eurozone economy rebounds as inflation cools down in July

Brussels: Economic growth in the eurozone rebounded in the second quarter, data showed Monday, but concerns remain over inflation that is slowing yet still stubbornly high, and over stagnation in the German economy. The EU's Eurostat data agency said growth in the 20-country single currency zone reached 0.3% over the April-June period after recording zero growth in the first three months of the year.

The first-quarter figure was revised from a decline of 0.1% that had signalled a technical recession.

The figures came after data last week showed that Germany's gross domestic product (GDP) stagnated between April and June, though the French and Spanish economies grew more than expected.


The European Central Bank (ECB) has hiked interest rates to their highest level since May 2001 to tame red-hot inflation, though its president Christine Lagarde last week indicated that the aggressive rate-hiking campaign could be paused. Analysts suggest that another hike is still a possibility, and could further constrain economic growth.

"With monetary tightening still expected to have its most dampening effect on growth later, continued broad stagnation of economic activity remains the most likely outcome for the coming quarters," said Bert Colijn, senior eurozone economist at ING.