Cruise ship comes to aid of French econ8k8 com log inomy

The world's second-largest cruise ship has been a savior for the French economy in the second quarter, after the latest eurozone economic figures showed that its construction at the Saint-Nazaire shipyard on France's western coast had resulted in a major financial uplift.

The 5,668-passenger capacity Utopia of the Seas, which belongs to the Royal Caribbean cruise line, is estimated to have added one billion euros ($1.078 billion) to the French economy, contributing to a 0.6 percent growth in trade in the three months to the end of June, and a 0.3 percent rise in GDP.

With the Olympic and Paralympic Games taking place in Paris across July and August resulting in a major influx of tourists, Finance Minister Bruno Le Maire said he was hopeful that economic growth could move ahead of the government's forecast of 1 percent.

"For two years, France has outperformed; our economic policies work and are giving tangible results," he added.

Across the whole of the 20-member eurozone, the outlook was generally promising, with signs that the bloc may have turned an economic corner after coming close to recession in 2023.

Data from the Eurostat agency showed that Ireland saw a growth of 1.2 percent, Lithuania 0.9 percent, Spain recorded a second-quarter growth of 0.8 percent, and Italy enjoyed a 0.2 percent rise in GDP.

Prospects to improve

"Prospects are likely to improve further throughout the year, driven by recent policy loosening by the European Central Bank and expectations for further interest rate cuts down the line," Pushpin Singh, a senior economist at consultancy the London-based Centre for Economics and Business Research, told the Guardian newspaper.

But there were declines in Latvia, by 1.1 percent, Sweden by 0.8 percent and, most significantly for the wider European economy, Germany, by 0.1 percent.

In addition, data from the country's federal statistics office showed that, against expectation, Germany saw its inflation rise by 2.6 percent in July.

"Germany is performing very poorly at the moment, especially in comparison with neighboring European countries where we have seen quite robust growth figures," Jens-Oliver Niklasch, an economist at the LBBW bank, told German broadcaster DW.

"Of course, Germany's export-orientated industry is more exposed to the weakness of the Chinese economy, for example, but many of the problems are homemade."

Carsten Brzeski, global head of macro at Dutch finance house ING, told Reuters that "while German data is stagflationary, the eurozone as a whole provides a picture of a relatively solid but potentially fading recovery with sticky inflation."

In the immediate future, he added the German economy will continue to hover between hope and despair.