Growth in the eurozone slowed to 0.3 per cent in the second quarter of this year, a new estimate predicted Friday, amid uncertainty about whether the economy could lose even more steam in coming months due to Britain's planned EU exit.

The eurozone struggled to rev up its economy after emerging from recession three years ago, but had recently started making some headway. There are fears that the economy will now take a hit from Britain's shock decision to leave the European Union.

The preliminary growth estimate released by the EU statistics agency Eurostat on Friday is for the months that preceded the Brexit referendum vote.

The 0.3-per-cent expansion in gross domestic product (GDP) follows growth of 0.6 per cent in the first three months of this year.

Analysts chalked up the slower growth to several factors, ranging from disappointing growth in France to weaker domestic demand.

"After the strong growth in the first quarter, which was helped by some temporary factors like the mild winter weather, it was no surprise that there would be some payback in the second quarter," ING bank analyst Peter Vanden Houte said.

Most analysts now expect the Brexit uncertainty to have an impact, though its extent is still unclear.

"The third quarter started on a good footing, but it is probably too soon to start downplaying the potential negative impact of Brexit on eurozone growth," Vanden Houte said.

"The uncertainty generated by Brexit ... comes on top of already sluggish foreign demand and fading support from the weak currency and low oil prices," UniCredit chief economist Marco Valli noted. "We think GDP growth may soften."

"Uncertainty is likely to weigh on investment, with a negative feedback loop on the labour market and private consumption," Barclays analyst Apolline Menut added.

Eurostat on Friday also released new inflation and unemployment data.

Eurozone inflation edged up to 0.2 per cent following stimulus measures by the European Central Bank, but the figure remains far short of its annual inflation target of just below 2 per cent.

Analysts predicted that the central bank will come under increasing pressure to take more action.

The inflation rate has hovered around the 0-per-cent mark for months, with fears of deflation dogging the currency area.

Inflation has been pushed down mainly by falling oil prices. Energy prices continued to fall in July, decreasing by 6.6 per cent. This was offset by gains in prices for food, alcohol and tobacco products, as well as for services and non-energy industrial goods.

Unemployment, meanwhile, remained unchanged in June at 10.1 per cent, its lowest level in five years. A total of 16.3 million people were out of work in the eurozone, with 2.9 millon of them under the age of 25, Eurostat said.

The currency area has made some progress in whittling down its jobless rate since it hit a record 12.1 per cent in 2013, but many still consider it to be unacceptably high.

"Later this year we will take stock of the results obtained by measures we took at EU level ... and continue our efforts to reduce unemployment even further," said Nathalie Vandystadt, a spokeswoman for the European Commission, the EU's executive.

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.