MNI: EUROZONE DATA: Preliminary Flash GDP (Q2........>

MNI: EUROZONE DATA: Preliminary Flash GDP (Q2 2019)

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- As expected, Eurozone growth halved in Q2, slowing to 0.2% q/q from 0.4% in Q1

- ... leaving the y/y rate at 1.1% (down from 1.2% in Q1) - lowest since Q4-13

- The prel. flash release does not include a breakdown by component or country

- However, we expect growth to have been driven largely by domestic demand

- Indeed, consumer spending is likely to have made another positive contribution

- ... as UE has continued to fall and real disposable incomes have been rising

- Meanwhile, credit conditions continue to support investment

- However, there are increasing signs that the EZ's until now solid domestic

fundamentals are starting to come under pressure

- Indeed, the externally-led manufacturing slowdown is beginning to have an

impact on activity in the services sector...

- ... while hiring intentions among Eurozone firms have been easing

- As such, the outlook for the second half of the year remains lacklustre, with

the economy unlikely to pick up pace