BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - Euro area expanded at a slower pace in the second quarter and inflation eased to a 17-month low in July, supporting the European Central Bank's view that the single currency economy needs significant stimulus as the outlook is getting 'worse and worse'.
Gross domestic product grew 0.2 percent sequentially, following the first quarter's 0.4 percent expansion, preliminary flash estimate from Eurostat showed Wednesday. The rate was in line with expectations.
Year-on-year economic growth eased to 1.1 percent from 1.2 percent. Nonetheless, the rate of growth exceeded the expected 1 percent. The revised data is due on August 14.
Data available from member countries showed softening of growth across the bloc.
France's growth slowed to 0.2 percent from 0.3 percent. Spain's GDP grew 0.5 percent in the second quarter, the weakest in five years, while Italy's economy stagnated.
Germany has not released its national accounts figures. However, Bundesbank last month said the economy is likely to shrink in the second quarter as the factors that boosted first quarter growth faded.
The weak economic data strengthens the case for the ECB to announce a package of stimulus measures at its next meeting in September, Jack Allen-Reynolds, an economist at Capital Economics, said.
In July, the headline inflation in the 19-nation currency bloc eased to 1.1 percent from 1.3 percent in June, a separate report from Eurostat showed. A similar lower rate was last seen in February 2018.
Likewise, core inflation, which strips out the volatile energy, food, alcohol & tobacco prices, slowed to 0.9 percent from 1.1 percent. Economists had forecast 1 percent.
Eurostat is set to release full data for July inflation on August 19.
Another report from the statistical office showed that the euro area unemployment rate reached its lowest level in almost 11 years in June.
The jobless rate dropped to 7.5 percent in June, as expected, from 7.6 percent in May. This was the lowest since July 2008. Unemployment decreased by 45,000 from May to 12.377 million in June.
Further, data showed that the youth unemployment rate dropped to 15.4 percent from 15.6 percent in May.
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