But the government, which has been pinning its hopes on growth to tackle the country’s chronic unemployment problems, will not have been cheered by slowing growth in investment, which rose only 0.2 percent compared to 0.6 percent in the first quarter.
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The first reading of second-quarter GDP in the euro zone comes two days after data showed that industrial output shrank by more than expected in June.
Companies that were selling down their inventories after building them up in the first quarter accounted for much of the stagnation, dragging GDP growth down by 0.4 points.
Italian GDP growth also missed forecasts.
One surprise was Portugal’s strong performance: The country has seen 0.4 percent growth for the past three quarters.
Estonia recovered in the second quarter, with GDP rising 0.8 percent following a 0.3 percent fall. The move came as the Bank tried to soothe the market by promising to work towards a stable currency following a surprise devaluation of nearly 2% on Tuesday. But it was below the analyst consensus forecast of 0.5 percent. Investment in real estate, however, contracted for the eighth quarter in a row. A year earlier the rate was 0.5%.
On the other hand, the Greek economy expanded 0.8 percent even as the debt crisis brought activity to a standstill late June. The data are in line with economists’ expectations and the annual rate matches Eurostat’s flash estimate from July 31.
With the recovery too weak to generate inflation, the European Central Bank is set to maintain and perhaps extend its policy support, Jennifer McKeown, a senior European economist at Capital Economics, said.
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“We suspect that growth in the region as a whole will slow further in the second half of the year as temporary boosts from a weaker euro and lower oil prices fade”, analyst Jennifer McKeown said in a research note.
