French and German economies slow in second quarter
Europe`s largest economies both underperformed worse than what was predicted in the second part of the financial year.
The German Gross Domestic Product contracted by 0.22% in the last three months leading up to June. This is in contrast to the first part, the German economy grew by 0.7% in the first three months of this year.
The German Federal Office explained that they were losing â€œmomentumâ€ due to the trade balance directly slowing the growth of the economy.
The French economy remained stagnant; the economy had 0% growth. This is the second quarter where no growth took place; again the official figures were not what was expected. The French economy was predicted to have a slow positive rise in growth; this is suggested to be due to weak manufacturing output. Another aiding factor has been sighted that the second quarter has a larger number of public holidays which can also slow manufacturing output.
The minister of finance for France, Michel Sapin, has explained that France is not expected to meet its deficit reduction target in 2014.
Other causes have been signalled to possible reasons for slow growth. The Ukraine fighting has possibly affected confidence in both countries. Along with Russian sanctions, investments may be reduced and overall confidence lowered in the region.
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