French GDP stagnates in Q2, misses expectations

Trade’s contribution to growth was at its highest since the last quarter of 2011. That translates into an annualized rate of 1.8%, Destatis said. And the economy is also getting a boost from the European Central Bank’s quantitative-easing program, which has driven down borrowing costs and weakened the euro, making eurozone exports more competitive on global markets.

Exports were a bright spot, up 1.7 percent in the second quarter after growing by 1.3 percent in the three months to June.

“After a very dynamic first quarter, the level of activity has held up”, he said.

The euro zone’s second-largest economy grew by 0.7 per cent in the first quarter, INSEE said, up from a previous estimate of 0.6 per cent.

The second quarter figure was lower than the 0.2pc expansion predicted by economists. But, taking into account the GDP data from France and Germany, a slightly weaker reading could be in the cards.

Without a stronger recovery, countries in the eurozone are struggling to tackle high debt and unemployment. In France, the latest figures show there have never been so many job seekers in the country.

This slowdown was due to declines in investment, inventories and consumer spending.

“Today’s zero figure is a rather bad surprise, dampening hopes of significantly above 1pc GDP growth this year”, said Julien Manceaux, an economist at ING.

Finance Minister Michel Sapin insisted that the second biggest economy in the eurozone was still on course to post 1 percent growth over the year as a whole.