Solid French, Spanish, Austrian data point to euro zone growth strength

PARIS (Reuters) - Solid second-quarter growth numbers from France, Spain and Austria on Friday suggest next week's figure for the broader euro zone could surprise on the upside, with German and Spanish inflation data also pointing to robust activity.

The three countries were the first to venture growth estimates for the April-June quarter before Eurostat releases a preliminary estimate for the euro zone on Tuesday.

Economists polled by Reuters are on average predicting that the economy of the 19 countries that use the euro will have grown by 0.5 percent from the previous three months.

France on Friday chalked up its third quarter in a row at that pace, putting the euro zone's second-biggest economy on course to surpass a government target of 1.6 percent for the year as a whole -- its best performance in at least six years.

Figures from the INSEE statistics institute showed the delivery of a massive luxury ocean liner last month boosted French exports, offsetting a drawdown in company inventories and slower business investment.

Though largely welcomed by economists as a solid second quarter performance, French growth pales compared to a recovery in Spain that has brought activity to levels last seen before the global financial crisis that started a decade ago.

The National Statistics Institute said Spanish growth reached 0.9 percent in the April through June period, improving chances the economy will grow by at least 3 percent in 2017 as the government expects.

Austria meanwhile maintained a quarter-on-quarter growth rate of 0.8 percent in Q2, boosted by exports and investment, according to the Wifo think-tank that compiles data for the government.

Capital Economics' Jack Allen said Friday's growth data suggested the wider euro zone economy would post an expansion of 0.6 percent in the second quarter.

Though Germany does not publish a Q2 growth estimate until mid-August, recent German surveys suggest the euro zone economy could expand by 0.7-0.8 percent, although that pace is unlikely to be sustained over the rest the year, Allen said.

"But we remain optimistic about the outlook -- we think that euro zone GDP will expand by an above-consensus 2.2 percent this year and 2.0 percent in 2018," Allen said in a research note.

The third quarter also appears to be getting off to a solid start, despite concerns the euro's rise to a 2-1/2-year high against the U.S. dollar could hurt exports.

The European Commission's monthly economic sentiment indicator (ESI) rose slightly for a third consecutive month in July to a new 10-year high, confounding expectations of a dip from June.

"The fact that the overall ESI went up suggests that for now other forces are dominating any currency impact on growth," JPMorgan economist David Mackie said in a research note.

Other data published on Friday showed Spanish and German inflation slightly topping expectations at 1.7 percent and 1.5 percent respectively while French inflation was in line with estimates at 0.8 percent.

Though the German and Spanish figures were stronger than expected, the fact the German rate was unchanged from last month meant that euro zone inflation due on Monday is likely to be stable at 1.3 percent, Capital Economics Stephen Brown said.

That is still some way below the European Central Bank's target of just below 2 percent, suggesting the data is unlikely to hasten any changes to its massive stimulus program.

(Reporting by Leigh Thomas; Editing by Andrew Callus and Catherine Evans)