· EMU GDP fell in 2008 Q2the first time since EMU-wide GDP data have been collected. Declines were experienced across the main EMU nations. Yr/Yr EMU growth is still 1.5% Italy’s growth is flat year/year. Germany is still at 1.7% Yr/Yr. This was the first quarter-on-quarter decline in EMU GDP since well before the euro was launched in 1998. Eurostat has constructed a series for the 15 current members of the euro zone that goes back to the start of 1995. The weakest performance on record for that period had been the stagnant second quarter of 2003. That now has been surpassed. 

· Q2 was not a good one for the global economy with most of the major economies showing Q/Q declines in GDP – the US and UK are exceptions. The Bundesbank put out a statement warning Germans not to get too pessimistic about growth: "The German economy has got to get through a rough patch for growth in the coming months. But overall there's no reason for excessive pessimism based on the development of the first half of the year," the German central bank said in a statement. Still the data are clear and the industrial trends still point lower. EMU inflation was revised to be one tenth of one percent less in July to 4% Yr/Yr. Still it si double the allowable ceiling for the ECB. 

E-Zone and main G-10 country GDP Results

Quarter over quarter-Saar

Year/Year

GDP

Q2-08

Q1-08

Q4-07

Q2-08

Q1-08

Q4-07

Q3-07

EMU-15

-0.8%

2.9%

1.5%

1.5%

2.1%

2.2%

2.7%

France

-1.2%

1.6%

1.5%

1.1%

2.0%

2.2%

2.4%

Germany

-2.0%

5.2%

1.4%

1.7%

2.6%

1.7%

2.4%

Italy

-1.1%

2.0%

-1.7%

0.0%

0.3%

0.2%

1.6%

The Netherlands

-0.2%

1.5%

5.2%

2.8%

3.7%

4.1%

3.5%

UK

0.7%

1.1%

2.5%

1.6%

2.3%

2.8%

3.0%

US

1.9%

0.9%

-0.2%

1.8%

2.5%

2.3%

2.8%

Japan

-2.4%

3.2%

2.4%

1.0%

1.2%

1.4%

1.8%