MOSCOW, August 15 (RIA Novosti) - Economic growth in the European bloc has drawn to a halt this quarter, official Eurostat data released on Thursday shows, as reported by AFP.
Growing tensions between the EU and Russia over Ukraine have reportedly contributed to the general economic uncertainty in the European bloc. "Strong growth figures in some of the former crisis countries and small Eastern member states were not enough to offset the slowdown in Germany ... hit by the 'Putin factor' as well as the reform laggards France and Italy," said Christian Schulz, economist at Berenberg Bank.
A surprising 0.2 percent fall in GDP, by the bloc’s economic giant, Germany, as well as registered stagnation in France mainly account for the unusually low growth figures across Europe. “It now looks very likely that GDP (gross domestic product) growth for the whole of 2014 will remain below 1.0 percent," analyst Peter Vanden Houte of ING Bank was quoted as saying.
The GDP of the 18-nation Union did increase from the first quarter of this year, when it grew by 0.2 percent, Eurostat, Luxembourg-based statistics agency, suggests.
It also shows the Eurozone inflation rate dropped to 0.4 per cent in July, which is now well below the ECB’s inflation target of 2 percent.
As the top Eurozone countries are seeing contraction, the rest of the countries show mixed results. Portugal and Spain continued to recover, with the latter showing a 0.6 percent growth, while Greece and Cyprus are going down in their economic rates.
The row between Europe and Russia over the Ukrainian standoff may adversely affect Europe, namely German growth in the coming months, The Economist reports.
Last week Moscow imposed sanctions on European food imports in response to West-initiated economic penalties against Russia, which included travel visa bans, and suspended economic and military cooperation.
The one-year ban targets beef, pork, fish, poultry, fruits and vegetables and nuts, as well as cheese and other dairy from the United States, the European Union, Canada, Australia and Norway.
