European Economic Data for May 2015

Date: 2015-10-07; view: 653.

Germany's latest GDP numbers point to an economy that only expanded 0.3% in the first quarter of 2015. That is below the 0.5% expansion expected and below the 0.7% growth that Germany experienced in the last quarter of 2014. (Source: Federal Statistical Office of Germany, May 13, 2015.)

It's almost ridiculous to speak of economic growth below one percent, as the reported number may be just noise or errors. Actual economic growth may be zero percent. But near zero percent expansion is simply the reality for much of Europe. In fact, Germany's economy only grew at 0.1% in 2013, and 1.6% in 2014. (Source: European Commission, last accessed May 13, 2015.)

“A lot of the pain in Europe continues to be driven by high unemployment and debt levels that exceed the size of the economy.”

Italy also released its GDP estimates on May 13, 2015; with lots of numbers close to zero percent as well. GDP grew at 0.3% in the first quarter of 2015, compared to the final quarter of 2014. But total national output, 385 billion euros, stayed unchanged from the same period last year. That is to say, Italy experienced zero percent GDP growth year-over-year. (Source: Istat, last accessed May 13, 2015.)

Economists would call this progress, as Italy's GDP growth came in at -1.7% in 2013 and -0.4% in 2014. From where I sit, the progress is painfully slow and results may continue to frustrate economists with overly optimistic forecasts.

A lot of the pain in Europe continues to be driven by high unemployment and debt levels that exceed the size of the economy.

Italy's government debt as a percentage of GDP stands at 132%, as of 2014 year-end. That means for every euro the economy generates, the Italian government must eventually pay back 1.32 euros to creditors. To say the least, European economies continue to struggle.