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Economy in Brief

European Countries' GDP Posting Strong Q2 Gains as Expected
by Randy Gernaat August 11, 2006

This past week has brought several additional preliminary releases of economic growth in Europe for the second quarter - mostly confirming analysts' expectations that growth would remain strong in Q2. Preliminary Dutch GDP, released yesterday, showed an increase of 1% over Q1 2006, its strongest showing since Q1 2004. Growth in the Netherlands was helped by strong exports and household consumption, particularly of durable consumer goods.

A flash estimate of French GDP, released today, showed the French economy booming in the second quarter. The French national statistical office (INSEE) estimated economic growth in France was up by between 1.1% and 1.2% over the first quarter of 2006 - much higher than many analysts were expecting. While the first release of expenditure components will not be released by INSEE until August 22nd, it seems clear that household consumption continues to be the clear driver of economic growth in France. INSEE's latest household consumption release for June showed French consumer spending up 1.7% over May and up 1.5% for the second quarter as a whole. With the strong pickup in growth in the German economy, French exports have also posted strong readings for the second quarter.

Preliminary Italian GDP figures for Q2 released today by the Italian national statistical office (Istat) showed a drop in growth from Q1. Istat estimates that the Italian economy grew by just 0.5% over Q1 after growing by 0.7% in the first quarter of this year.

The Office for National Statistic's (ONS) preliminary GDP release from 3 weeks ago showed UK economic growth up slightly in Q2 at 0.8%. The first estimate of economic growth in Germany will be released next Monday, the 14th of August. Analysts expect German growth to come in much higher than the 0.4% growth recorded in Q1 of this year - pushed in large part by stronger domestic demand related to the World Cup.

Gross Domestic Product
(Period-to-Period % Change)
Q2 2006   Q1 2006 2005 2004 2003 2002
Netherlands 1.0% 0.3% 1.53% 1.95% 0.34% 0.08%
France 1.1-1.2% 0.5% 1.20% 2.03% 1.13% 1.11%
Italy 0.5% 0.7% 0.11% 0.88% 0.11% 0.34%
United Kingdom 0.8% 0.7% 1.86% 3.26% 2.67% 2.06%
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