HK grew in the second quarter; Spain continued contraction

The Chinese city’s economy grew by 3.3% for the second quarter on a quarter-to-quarter basis, following a still sharp decline of 4.4% in the first quarter and an expected 1.7% growth by economists. This comes a day after France and Germany both reported growth in the same period of 0.3%.  Compared with last year’s Q2 figure, GDP still contracted by 3.8%

The growth in the city’s economy was helped by strong domestic demand and the same led experts to revise their annual GDP estimates upward.

See the Bloomberg report here.

Meanwhile, it is not all rosy in Europe as one of the weakest in the developed economies, Spain, still saw a contraction for the same period.  Though better than the contraction seen in the first quarter, the 1% drop in GDP for Q2 was still  worse than the 0.9% estimated by the Bank of Spain.

Battling the collapse of a domestic housing boom and Europe’s highest unemployment rate at 18 percent, Spain is using stimulus measures worth 2.3 percent of GDP to support the economy as it puts builders to work on public projects across the country.
“Until the end of 2010, we definitely see Spain continuing to under perform the rest of Europe,” said Giada Giani, an economist at Citigroup Global Markets in London.

A report from Bloomberg reads:

Battling the collapse of a domestic housing boom and Europe’s highest unemployment rate at 18 percent, Spain is using stimulus measures worth 2.3 percent of GDP to support the economy as it puts builders to work on public projects across the country.
“Until the end of 2010, we definitely see Spain continuing to under perform the rest of Europe,” said Giada Giani, an economist at Citigroup Global Markets in London.
More here.
I suppose this shouldn’t have come as a surprise.  Between the weaker and stronger economies, the latter have the better wherewithal to fight the slump in their own respective economies.  While not necessarily putting Spain in the same category as the weaker Baltic states, they are the ones who are in dire need of stronger policies to help them move out of the recession.  For their policies to take effect longer than the others is an attribute that comes naturally with them.
With some of the biggest economies now jumping out of recession, and the US reporting a better than expected number, that is a 1% contraction, I am very confident it will similarly not disappoint when it reports its numbers for the third quarter.
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