A leap in German industry output over the second quarter and a moderate rise in Italian economic growth added on Friday to evidence the euro zone is in a robust recovery phase but with divergences within the bloc. The Bank of Spain highlighted a divide between strength in Europe's largest economies and a less impressive rebound in the currency zone's laggards, estimating the Spanish economy grew by an anemic 0.2 percent in the second quarter. Economists fear Spain's economy could contract again at the back end of the year as government debt-cutting measures kick in. Italian GDP grew by 0.4 percent from the first quarter but the euro zone as a whole is expected to have expanded by 0.6 percent or more in the second quarter, suggesting much stronger growth from the likes of Germany. “This 0.4 percent growth is pretty normal but given that it's coming off the extraordinary fall in GDP during the recession, it shows the recovery is going to be slow,” said Giada Giani at Citigroup of Italy's performance. German industry output dropped by 0.6 percent on the month in June but following sharp rises in April and May, was up 5.4 percent over the second quarter as a whole, the biggest quarterly gain since German reunification in 1990. “June's modest fall in industrial production does not change the picture of a rapidly recovering industrial sector, which probably caused GDP to surge in Q2,” said Jennifer McKeown at Capital Economics, who forecast 1.2 percent Q2 GDP growth there. GDP figures for Germany, France and the euro zone will be published next Friday. A run of upbeat euro zone data so far in the third quarter was surprisingly strong, ECBpresident Jean
