Country Report Estonia
- ID: 2114012
- August 2015
- Region: Estonia
- 67 Pages
- The Economist Intelligence Unit
The euro zone economy expanded by 0.3% quarter on quarter in the second quarter of 2015. Germany grew by 0.4% (below our projection of 0.6%), France recorded zero growth (we had projected 0.2%) and Italy expanded by 0.2% (in line with our forecast). Our medium-term assessment of the euro zone's prospects remains unchanged, but we will be revising down our 2015 real GDP forecast for the bloc, from 1.5% to around 1.3%.
The preliminary second-quarter national accounts data for the euro zone lend weight to our view that the euro zone's acceleration in early 2015 was largely down to transitory factors, notably windfall gains from plunging oil prices. We had expected momentum to ebb gradually in the second half of the year, but this process appears to have started in the second quarter.
Signs of weak investment spending in the euro zone's two largest economies remains a concern, pointing to a lack of confidence in the context of all-time low interest rates. A breakdown of the Italian GDP figures isn't available, but other data suggest that fixed investment increased in the second quarter, albeit from an exceptionally low base given a 30% fall since 2007.