Eurozone growth slows as trade tensions persist

Economic growth in the Eurozone slowed in the second quarter this year, official data showed on Tuesday, as concerns rose that global trade tensions fuelled by Washington may be reining in the European economy.

Growth in the 19-country single currency bloc hit 0.3 percent in the April to June period, below the 0.4 percent in the previous quarter, the EU’s Eurostat statistics agency said.

Major economic institutions — including the European Central Bank and International Monetary Fund — have warned that growth in the Eurozone risked taking a hit from the rising protectionism that stemmed from the “America First” policies of US President Donald Trump.

Eurostat said that on a year-to-year basis, economic growth in the Eurozone reached 2.1 percent, far lower than the 2.5 percent in the previous quarter but still ahead of the 1.8 percent reached in 2016.

This figure is lower than a forecast by analysts surveyed by data service Fact set, who tabled for growth of 0.4 percent.

Eurozone inflation meanwhile accelerated in July to 2.1 percent driven by high energy prices. This was slightly faster than forecasts by analysts and about on level with the ECB target.

In a flurry of data released before the summer break, Eurostat also said unemployment in the Eurozone remained flat in June, at 8.3 percent.

Unemployment in the euro area has been falling steadily since it fell below the symbolic threshold of 10.0 percent in September 2016.

However, it is still higher than the average rate before the financial crisis, when it stood at 7.5 percent.

Among the 19 single currency countries, the lowest unemployment rates in May were recorded in Germany at 3.4 percent, according to Eurostat.

The highest rate was recorded in Greece with 20.2 percent in April, the latest available figure. Crisis-hit Spain saw its rate fall to 15.2 percent.