Chart Of The Day

Chart of the Day: Euro Area GDP

By Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman

The euro area provided its first estimate of Q1 overnight and it was another disappointment. The 0.2% decline in GDP comes after a 0.6% contraction in Q4 and confirms the euro area as the weakest among the high income regions. It is the sixth consecutive quarterly contraction, a record of dubious distinction.

This Great Graphic was posted on lemasabachthani blog. The first chart shows how the PMI does a fairly good job tracking the region’s GDP. The April PMI readings indicate Q2 is off to a soft start.

The second chart shows the changes in the overall levels of GDP, index to 2005 (=100). That German GDP has surpassed its pre-cycle peak seems well appreciated. The magnitude of Italy’s under-performance may be somewhat surprising, though its weakness is understood.

With such high (recorded) unemployment, one might have expected a worse performance by Spain, though it has begun more clearly under-performing. Perhaps most remarkable is how average (EMU level) France’s performance has been.


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