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The Eurozone economy grew by more than expected in the second quarter, expanding by 0.3 per cent and allaying fears that the nascent recovery in the bloc may be running out of steam.

Tuesday’s gross domestic product growth figure compared with 0.3 per cent over the first quarter and was above forecasts of economists polled by Reuters, who expected growth to slow slightly to 0.2 per cent.

In June, the European Central Bank became the first major central bank to start cutting interest rates. It forecast demand would steadily recover in the bloc this year as inflation slowed, wages kept rising and global trade picked up.

However, recent business surveys have indicated that the Eurozone economy has been impacted by geopolitical tensions, weaker global growth and fragile consumer confidence.

In figures released earlier on Tuesday, the German economy dragged down the rest of the bloc with output falling 0.1 per cent in Europe’s largest economy in the second quarter.

The federal statistical agency said the decline reflected lower investment in equipment and buildings. Italy’s economy also slowed to 0.2 per cent, as higher services output offset weakness in industry and agriculture.

However, the French economy grew slightly faster than expected at 0.3 per cent in the three months to June, mainly owing to a boost from external trade, while France’s first-quarter performance was also revised up to 0.3 per cent.

Spain’s economy continued to set the pace, growing at a faster than forecast pace of 0.8 per cent in the three months to June, thanks to strong consumer spending and exports.

Analysts worry that France’s inconclusive parliamentary election will create a political vacuum at the heart of Europe, hampering efforts to reduce high debt and deficit levels, eroding consumer confidence and weighing on business investment.