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The latest spate of economic data confirms trends that have been observable for some time. While the United States is once again living up to its decades-old reputation as a very resilient economy, European locomotive Germany is clearly in the doldrums.

In the news: Several countries publish their preliminary growth figures for the second quarter.

  • Belgium comes out at 0.2 percent economic growth versus the first quarter, the National Bank (NBB) estimates. This is less than hoped for and also lower than the 0.4 percent growth rate a quarter earlier, but the growth engine has still not stalled. Compared to a year earlier, i.e., the second quarter of 2022, growth is 0.9 percent.

NBB economic growth forecast Belgium:

  • France and Spain also continue to show economic growth, despite months of speculation about a possible recession. The French economy grew 0.5 percent in the second quarter from a quarter earlier. This may come as a surprise after the wave of social unrest in the country. While domestic consumption took a hit, exports were the big driver and drowned that out. Economists point to the popularity of French cars abroad, among other things. Spain's economy showed similar growth, 0.4 percent.
  • While the rest of the euro zone is still holding up well, the currency union's largest economy, Germany, is already fully under the spell of the recession ghost. The German economy stopped growing in the second quarter (+0.0 percent compared to the first quarter). That's slightly better than the contraction a quarter earlier (-0.1 percent) and in the final quarter of 2022 (-0.4 percent), though.

Zooming in: The latest figures confirm that Germany has become the weak link of Europe and - depending on which definition you use - is actually already in a form of recession. Several economists link it to the war in Ukraine, which caused imports of cheap Russian natural gas to stall. "The energy transition is not at all ready, and on top of that, Germany also has huge backlogs in terms of digitalization and modernization of its infrastructure," ING economist has repeatedly warned.

America resilient

The future: Partly because the German engine is sputtering, European sentiment among business leaders for the second half of the year is rather negative, according to the latest , The rescue may well come from outside. The government in China is pulling out all the stops to stimulate its economy, and the latest growth figures from the United States are surprisingly high.

  • "The U.S. economy is defying gravity," write ABN Amro economists. Economic growth came in at 2.4 percent year-on-year in the second quarter, than the 1.8 to 2.0 percent economists expected on average.
  • According to the crystal ball of the International Monetary Fund (IMF), the U.S. economy is going to grow twice as fast as the European economy over all of 2023 (1.8 percent versus 0.9 percent growth, with Germany the only one of the major economies to shrink.

IMF economic growth projections for 2023:

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