15.08.201403:52:31UTC+00Eurozone stagnates in growth in second quarter

Economic recovery in the eurozone has stalled to boost pressure on the European Central Bank (ECB) to enact more aggressive policies to spur growth in the region.

Official figures released on Thursday showed that the eurozone’s gross domestic product was unchanged in the second quarter of 2014 to halt the pace set by a 0.2% growth during the first three months of the year. Inflation in the monetary union, another area of high concern for the ECB, dropped to 0.4% to hit its lowest level in four and half years.

Primary contributors to the eurozone’s disappointing results are the performances of its largest economies in Germany, France, and Italy. Germany, which accounts for nearly 30% of GDP for the eurozone, saw its economic output drop by 0.2% partly due to tensions with Russia. France’s economy similarly posted no improvement and looks set to miss its target budget deficit of 3.8% while Italy wound up once more in a recession.

The three core members offset the gains made by peripheral nations which exceeded expectations. Spain and Portugal’s economies each expanded by 0.6% while the Dutch economy bounced back from a contraction in the first quarter by growing on a 0.5% rate. The overall size of the block’s economy has still not yet surpassed the level it was on six years ago before the crisis and lags behind both the US and UK.

Confidence among investors have taken a large hit with investments among companies dropping for the 10th straight quarter by 0.8 while household investment fell by 2.4%. Overall investments declined by 1.1%. Chief economist Bruno Cavalier from Paris’ Oddo & Cie Bank says that, “Confidence is completely absent today both on the business and household side. I don’t see anything that would change this in the near future.”