Economic growth in the euro zone accelerated in the third quarter, beating expectations, official figures showed on Wednesday.
Seasonally adjusted GDP rose by 0.4% in the third quarter, according to preliminary figures from the European Union’s statistics agency Eurostat. In the wider area, it increased by 0.3%.
By comparison, the growth rates for the two areas in the second quarter were 0.2% and 0.3%, respectively.
Analysts had expected eurozone gross domestic product (GDP) growth to be close to 0.2%.
Germany, the region’s largest economy, saw its GDP rise by 0.2%, beating most analysts’ expectations. Germany’s GDP fell by 0.3% in the second quarter.
Spain reported an increase of 0.8% due to the Summer Olympics, and France reported an increase of 0.4%. In contrast, growth in Italy was flat.
Ireland recorded the largest increase at 2%. However, Ireland’s GDP is influenced by the accounting activities of multinational companies and is notoriously volatile.
GDP across the euro area and the EU increased by 0.9% year-on-year.
“Since May, the PMI has been showing a poor and gloomy outlook for the eurozone economy, but GDP in the third quarter was surprisingly strong,” said Bart Colin, ING’s chief Dutch economist. .
“The acceleration from 0.2% to 0.4% shows that concerns about an impending recession are overdone.
“Still, don’t overestimate its strength based on this better-than-expected growth measure.”
Rabobank said: “There are clear differences between manufacturing and services. Industry performance also varies widely across Member States.
“Overall, the key message from these numbers today is that although structural challenges in the industry and weak external demand are likely to constrain the pace of expansion in the coming quarters, Fourth, the recovery is still holding, and growth is likely to slow again after the third-quarter rally.”
