European Economic Growth Positive and Bolstering Global Economy
Corolla Financial analyst says that European economy is rebounding and will likely outpace emerging markets.
Online, August 14, 2013 (Newswire.com) - After being blamed for numerous global economic problems over the past few years, the Eurozone is finally looking positive and making meaningful contributions to the health of the global economy.
Data released this week shows that the 17 nation bloc is growing again after a year and a half of contraction. Though the data does not suggest a boom, it is a positive momentum shift and indicates healthy economic growth.
Manufacturing across Europe and especially in Poland and the Czech Republic rose in July, and imports from China increased by 2.8 percent. Japanese imports rose by 8.6 percent in June, the most since February of 2011. Exports have outpaced imports in recent years, leaving the euro area's trade surplus around 3 percent of GDP in the first quarter of 2013, the most since the euro began trading in 1999.
After so much fear of the Eurozone falling apart as countries including Greece and Spain chased bailouts, a change in sentiment is refreshing to say the least. Analysts and investors around the world are gaining confidence in the Eurozone once again, and a recent survey showed that 88 percent of portfolio managers believe that the European economy will improve in 2014. Only 16 percent now perceive Europe as a significant risk compared to 59 percent who were wary in 2012. For the first time in three years, Europe tops the global growth expectation list over other economies around the world.
With slowing in emerging economies including China and Brazil, the gained momentum may prove to be important to help stabilize global economic growth.
The German economy grew by its strongest rate in more than a year in the second quarter, beating forecasts and suggesting that Europe's largest economy will help to pull the euro zone out of recession. The economy expanded by 0.7 percent, which was more than the median forecast in a Reuters poll of economists for expansion of 0.6 percent and was the biggest quarterly rise since the first quarter of 2012.
Though the Eurozone is not out of the dark, the recent numbers do indicate positive progress as well as sustainable growth. Additionally, investor sentiment is on the rise which will likely help to fuel continued growth.
According to Corolla Financial analyst Adam Taylor, "It is not yet clear whether Europe is in the clear, but positive numbers and returning confidence among investment professionals are strong indicators that things are stabilizing. Emerging markets are still important, but we are allocating larger portions of our portfolio in Europe than we were 6 months ago, that's for sure."