Euro area Q2 GDP growth leaves economists' forecasts in the dust

Euro area second quarter gross domestic product growth left economists' forecasts in the dust.

According to preliminary figures from Eurostat, in seasonally adjusted terms GDP was ahead by 0.7% quarter-on-quarter.

Consensus among economists had been for an increase of 0.1%.

The previous estimate for GDP growth covering the first three months of 2022 was marked down from 0.6% to 0.5%.

Commenting on the latest data, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, predicted that Friday's print would be revised lower and nearer to his estimate for 0.2% growth on the quarter come early September.

That was because it was only then that Eurostat would incorporate figures for Ireland, where GDP was expected to have reversed the near-11% leap seen during the first quarter of 2022.

Eurostat does not provide a detailed breakdown of the expenditure components of GDP alongside its flash estimates.

Commenting on the latest data, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, predicted that Friday's print would be revised lower and nearer to his estimate for 0.2% growth on the quarter come early September.

That was because it was only then that Eurostat would incorporate figures for Ireland, where GDP was expected to have reversed the near-11% leap seen during the first quarter of 2022.

"Looking ahead, business surveys for July, such as S&P Global's composite PMI, suggest that GDP will fall sharply in Q3 and leading indicators suggest surveys will drop further over the coming months, supporting our view that the EZ economy will be in recession by the end of the year, lead predominantly by downturns in Germany and Italy," Vistesen added.