Germany and France out of recession

Germany and France are officially out of recession as both countries enjoyed quarterly growth, defying policymakers and economists and bringing hope of a broader European recovery. After being severely rocked by a devastating 3.5% contraction in the first quarter, Germany bounced back in the second, recording a 0.3% rise in GDP. France similarly, saw a surprising 0.3% growth in its GDP.

Consequently, the euro zone GDP data due to be released later is giving hopes of an upside trend. "Taking the upward surprise in the German and French data together, the euro zone economy should have been roughly flat in Q2," said economist Nick Kounis of Fortis. The developments in Europe coupled with the American Federal Reserve's assessment that the U.S. economy is showing improvements after the worst financial crisis the world has experienced in decades suggest a positive outlook for some nations in the not too long future. However, figures in nations such as the UK and Italy still remain on the down-trend.

With state-funded stimulus packages being relied upon in almost every part of world, experts are wary that the present positivism based on examples such as the German and French economies may not be an accurate reflection of the actual situation. "As long as it's not clear that the bank's capital base is robust, we can't assume that the crisis is over," said Jens-Oliver Niklasch of LBBW.