Eurozone growth slows, unemployment stagnates

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Economic expansion in Europe’s currency union dived in the second quarter amid concerns over the potential fallout from the Brexit referendum. But the jobless rate hovered at the same level as in the previous quarter.

Growth in the eurozone halved in the April-to-June period to 0.3 percent, dropping from a far more robust expansion of 0.6 percent in the previous quarter, data released by the Eurostat statistics agency showed on Friday.

The period covered by the gross domestic product (GDP) data largely pre-dates the British vote in late June to leave the European Union which the European Central Bank (ECB) warned last week would negatively influence growth in Europe for years to come.

Signals so far are that economic activity in the eurozone is proving resilient despite the vote after strong initial shocks rocked the financial markets.

Eurostat also released the bloc’s unemployment figures for the month of June, which showed that the jobless rate in the region remained stable at 10.1 percent.

The number of people out of work in the eurozone did decrease by 37,000 from May to June, but the drop was not enough to alter the seasonally adjusted unemployment rate, the agency said.

ECB keeps rates steady after Brexit shock

While the eurozone has made some progress in reducing the rate of joblessness in recent months, many still view the number of people out of work to be unacceptably high.

A divergence

A total of 16.3 million people were unemployed across the bloc in June, and just under 3 million of them were under the age of 25, leading to a youth unemployment rate of 20.8 percent.

There’s a vast divergence among the area’s members on this front. Countries like Malta, the Czech Republic and Germany recorded the lowest jobless rate, with overall unemployment at around 4 percent. Malta and Germany also posted the lowest youth unemployment at around 7 percent.

Greece and Spain, on the other hand, continued to report the highest figures, with overall unemployment around 20 percent and youth unemployment above 45 per cent.

But Spain was among the countries that in June posted the largest year-on-year decrease in overall unemployment.

At the same time, Italy – the bloc’s third-biggest economy – witnessed a mixed trend. Youth unemployment fell to 36.5 percent, the lowest since October 2012, but the overall jobless rate edged up to 11.6 percent.

Meanwhile, consumer prices across the eurozone rose 0.2 percent in July, after gaining 0.1 percent in June. Nevertheless, the rate is far off the ECB’s target of just below 2 percent.

Eurozone inflation has stuck around the 0-percent mark for months, as fears of deflation have dogged the currency area.

European officials, however, have argued that external factors such as oil prices have kept rates low, rather than across-the-board drops in price levels.

sri/hg (dpa, AFP, Reuters)

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