A look at economic developments around the globe

The Associated Press    Translate This Article
13 August 2010

A look at economic developments and activity in major stock markets around the world Friday:

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The economy of the 16 countries that use the euro expanded by a better-than-expected 1 percent during the second quarter as growth engine Germany grew at its fastest pace since reunification two decades ago.

The eurozone grew at its quickest rate in nearly four years, and faster than the U.S. during the same quarter. The U.S. grew by 0.6 percent during the April to June period compared to the previous quarter.

That defied expectations from just a couple of months ago when Europe was threatened by a severe government debt crisis. The eurozone economy also beat market forecasts for a 0.7 percent rise and the muted 0.2 percent growth from the first quarter.

Still, many economists think the second quarter will be as good as it gets for the eurozone this year. Governments across the region are slashing spending programs and raising taxes to cut their ballooning debt levels, depriving the economy of stimulus from government spending.

Germany's DAX fell 0.4 percent and France's CAC-40 fell 0.3 percent but the FTSE 100 index of leading British shares closed up 0.2 percent.

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BERLIN — Germany's economy surged 2.2 percent in the second quarter, the fastest pace in at least two decades, as a global recovery fed demand for its exports.

The first-quarter growth figure for Europe's biggest economy also was revised up to 0.5 percent from 0.2 percent.

It was the strongest performance since the reunification of West Germany and communist East Germany two decades ago. The previous best was 1.9 percent growth in the first quarter of 1992.

Economists had expected second-quarter growth of only 1.3 percent. In year-on-year terms, output rose by 3.7 percent.

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HONG KONG — Hong Kong's economy expanded for a fifth straight quarter, boosted by growth in China and elsewhere in Asia, the government said. It also warned of the risk of a dangerous property bubble.

The Chinese territory said gross domestic product expanded 1.4 percent in the second quarter from the previous quarter. GDP grew 2.4 percent in the first quarter. The growth was due to stronger exports of goods and services, tourism and the recovery in Asian markets.

But Hong Kong Financial Secretary John Tsang warned that abundant global liquidity and ultra-low interest rates created the risk of a property bubble forming in Hong Kong. He said he was introducing additional measures to increase the supply of housing and curb speculation.

Hong Kong's Hang Seng index shed 0.2 percent. Elsewhere in Asia, shares rose. Japan's Nikkei 225 stock average added 0.4 percent, South Korea's Kospi gained 1.4 percent, the Shanghai Composite index rose 1.2 percent and Australia's S&P/ASX 200 closed up 1.3 percent.

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PARIS — France's national statistics agency says the economy grew 0.6 percent in the second quarter, accelerating from an upwardly revised rate of 0.2 percent in the first three months of the year.

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WARSAW, Poland — Economic data showed a sharp divergence in growth in Eastern Europe, with the Baltics and Slovakia bouncing back but Hungary and Bulgaria still lagging badly.

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