Posted on 05/27/2007 12:31:37 AM PDT by Jordi
Eurozone economic growth outpaced the US for the fourth consecutive quarter at the start of 2007 as the damaging impact of higher German value-added-tax did not live up to expectations.
Growth in gross domestic product in the 13-country region decelerated modestly in the first three months of the year, but at 0.6 per cent the rate of increase was higher than expected and faster than the 0.3 per cent seen in the US, according to Eurostat, the European Union's statistical office. Eurozone GDP had increased by 0.9 per cent in the fourth quarter of last year.
The data highlighted the apparent resilience of the region's recovery, despite a stronger euro and the slowdown in the US. Economists have become increasingly confident that the region could this year at least match last year's 2.7 per cent growth rate - the fastest for six years.
Erik Nielsen, economist at Goldman Sachs, said the eurozone was benefiting from its "better balance sheets - whether it is the budgets of governments or households. We don't have deficits that weigh down on household spending."
It had also proved adept at exporting to fast-growing economies in Asia.
The strength of Germany's economy surprised economists. The eurozone's biggest economy increased its VAT rate by threepercentage points at the start of the year - the biggest tax increase in German history - which until recently had been expected to result in a dent in the growth figures.
But the first quarter still saw Germany's economy expand by 0.5 per cent, after 1.0 per cent in the final three months of 2006.
Spanish growth also remained robust - the 1 per cent increase in the countrys' GDP in the first quarter followed 1.2 per cent at the end of 2006.
Italian GDP rose by just 0.2 per cent in the first quarter, after 1.1 per cent in the previous three months.
France also disappointed. The 0.5 per cent growth rate it saw in the first quarter was lower than expected. * Cheaper household utility bills last month helped push UK inflation down from its March high but analysts remained concerned about the rising cost of food, Jamie Chisholm writes from London.
The index of consumer prices rose by 0.3 per cent between March and April, taking the annual inflation rate to 2.8 per cent, the Office for National Statistics said yesterday.
It does not surprise me that Europe is beating us. The Dollar is sucking pretty bad. The exchange rate is horrible!
it shouldn’t be surprising. Certain areas of the eurozones have very low taxes
a low dollar should help US exports and help EU imports, but hurt US import and EU exports
Apparently it's not so simple. Found on the Financial Times: ...Most dramatically, the German VDMA engineering association reported that orders in March were 47 per cent higher in March than a year before, highlighting the industrial rebound in Europe’s largest economy. “An unbroken investment appetite at home as well as noticeably high volumes of big ticket business overseas have resulted in the highest growth rate since the mid-1970s in mechanical engineering,” said Ralph Wiechers, the VDMA’s chief economist
I don’t know. I think it’s all mirrors. We’re importing everything there is from China. Why not from Germany? I mean, why not a SINGLE THING from Germany ?
I’d say that europe must be more than just manufacturing...just as america is more than just manufacturing.
Orders of what? Smoke?
Anything’s fast from zero.
Europe is not one country. The US is.
it’s BS.
GDP - per capita (PPP) 2007
Data source: 2007 CIA World Factbook
1 Bermuda $69,900
2 Luxembourg $68,800
3 Equatorial Guinea $50,200
4 United Arab Emirates $49,700
5 Norway $47,800
6 Guernsey $44,600
7 Cayman Islands $43,800
8 Ireland $43,600
9 United States $43,500
10 Jersey $40,000
11 British Virgin Islands $38,500
12 Iceland $38,100
13 Denmark $37,000
14 Hong Kong $36,500
15 Canada $35,200
16 San Marino $34,600
17 Austria $34,100
18 Switzerland $33,600
19 Japan $33,100
20 Australia $32,900
21 Finland $32,800
22 Belgium $31,800
23 Netherlands $31,700
24 Sweden $31,600
25 United Kingdom $31,400
25 Germany $31,400
26 Faroe Islands $31,000
27 Singapore $30,900
28 France $30,100
29 Italy $29,700
30 Qatar $29,400
31 European Union $29,300
32 Taiwan $29,000
33 Gibraltar $27,900
34 Isle of Man $27,800
35 Monaco $27,000
35 Spain $27,000
36 Israel $26,200
37 New Zealand $26,000
38 Bahrain $25,300
39 Falkland Islands (Islas Malvinas) $25,000
39 Liechtenstein $25,000
40 Macau $24,300
41 Korea, South $24,200
42 Andorra $24,000
43 Brunei $23,600
44 Greece $23,500
45 Slovenia $22,900
46 Aruba $21,800
47 Kuwait $21,600
47 Czech Republic $21,600
48 Bahamas, The $21,300
49 Malta $20,300
49 Cyprus $20,300
50 Greenland $20,000
51 Trinidad and Tobago $19,700
52 Estonia $19,600
53 Puerto Rico $19,100
53 Portugal $19,100
54 Barbados $18,200
55 Slovakia $17,700
56 French Polynesia $17,500
57 Hungary $17,300
58 Netherlands Antilles $16,000
59 Latvia $15,400
60 Lithuania $15,100
61 Guam $15,000
61 New Caledonia $15,000
61 Argentina $15,000
62 Virgin Islands $14,500
63 Oman $14,100
63 Poland $14,100
64 Saudi Arabia $13,800
65 Mauritius $13,500
66 Croatia $13,200
67 South Africa $13,000
68 Malaysia $12,700
68 Libya $12,700
69 Chile $12,600
70 Northern Mariana Islands $12,500
71 Russia $12,100
72 Costa Rica $12,000
73 Turks and Caicos Islands $11,500
74 Botswana $11,400
75 Antigua and Barbuda $10,900
76 Uruguay $10,700
77 Mexico $10,600
78 Bulgaria $10,400
79 World $10,000
80 Kazakhstan $9,100
80 Cook Islands $9,100
80 Thailand $9,100
81 Turkey $8,900
81 Turkmenistan $8,900
81 Iran $8,900
82 Romania $8,800
82 Anguilla $8,800
83 Tunisia $8,600
83 Brazil $8,600
84 Belize $8,400
84 Colombia $8,400
85 Macedonia $8,200
85 Saint Kitts and Nevis $8,200
86 Dominican Republic $8,000
87 Panama $7,900
88 Belarus $7,800
88 Seychelles $7,800
89 Algeria $7,700
90 Ukraine $7,600
90 Palau $7,600
90 China $7,600
91 Namibia $7,400
92 Azerbaijan $7,300
93 Gabon $7,200
94 Cyprus - Turkish area $7,135
95 Suriname $7,100
96 Saint Pierre and Miquelon $7,000
97 Venezuela $6,900
98 Peru $6,400
99 Fiji $6,100
100 Cape Verde $6,000
The U.S. is Germany's second-largest trading partner. (Don't know the first).
These numbers don’t mean much as Europe is starting from a much lower base, having been mired in recession or low economic growth for years, vs the US which has been on a tear for the last few years. Where were those articles when the US was kicking Europe’s butt?
Not everything is bad for us. The federal budget deficit is shrinking and the dollar is strengthening some. Also, many of our public companies are beiing taken private. Whether that is to avoid Sarbanes-Oxley, you be the judge.
Normally it shouldn't matter whether an economy starts from a lower base. An economy should be able to grow at a stable compounded rate year after year. However, considering that all central banks keep their economies on an artificial credit cycle for flawed reasons, you are absolutely correct.
When the U.S. is up, the articles emphasize how slow growth is preferable to cowboy capitalism.
Sarbanes-Oxley is an employment act for investment bankers in London. So much so that Thomas Sowell says that they jokingly wonder if they should erect statues to the two.
I don’t understand this article. 4th quarter GDP was up 2.5 percent. 1st quarter 2007 was up 1.3.
btt
Well said. S-O has killed the IPO market, and has led the FTSE to overtake the NYSE.
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