The economy expanded 0.3 percent in the second quarter, matching the Econoday consensus and the flash estimate, marking an increase from the 0.1 percent growth recorded in the first quarter. Compared to the same quarter last year, the economy grew 0.8 percent, up from 0.6 percent in the first three months of the year, beating the consensus forecast of 0.7 percent.

Trade was a drag on the economy in the first and second quarters, subtracting 0.5 and 0.3 points, respectively. During the second quarter, exports rose 0.5 percent, bolstered by pharma, after a 1.2 percent decline during the first quarter. Imports grew 1.3 percent in the second quarter, their biggest gain since a 1.9 percent increase in the second quarter of 2023.

Changes in inventories contributed 0.5 points to GDP in the second quarter, helped mainly by transportation equipment. With the tariff dispute with the US, inventory buildup has been a regular feature in many European economies as businesses were stockpiling ahead of their imposition.

Consumers remained subdued in the second quarter, with household consumption flat. Still, that was an improvement over the first quarter when spending pulled back 0.3 percent. Government spending on the other hand rose 0.4 percent in the second quarter, the 18th consecutive quarter of increased outlays.

Trade continues to be the dominant story, and will remain so for the coming quarters as the effects of the US tariffs work their way more fully into the economy.

No revision expected from the flash with a strong 0.3 percent rise on quarter.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Following the release of the flash estimate about four weeks earlier, the second report incorporates additional data to provide a more accurate reading. This is also revised in the final report, published in the third month after the reference quarter.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.