Europe's economy shows modest growth after months of stagnation as rate hikes weigh on businesses
Europe's economy is growing again — but not by much
FRANKFURT, Germany (AP) — The European economy grew modestly in the most recent quarter, breaking out of a months of stagnation or contraction as higher interest rates designed to fight inflation make it more expensive for households and businesses to borrow, invest and spend.
The 20 countries that use the euro currency and their 346 million people saw 0.3% growth in the April-to-June period, the EU statistics agency Eurostat reported Monday. That’s an improvement over zero growth in the first quarter of this year and a slight decline in fourth quarter of last year, but not by much.
A revision raised figures for the first quarter from a decline of 0.1%, wiping out two straight quarters of declining output. Inflation in the eurozone, meanwhile, continued its gradual decline, falling to 5.3% in July from 5.5% in June.
Europe's economic growth got a boost by 0.5% growth in France and 0.4% in Spain, where lower inflation has helped lift consumer spending power.
