Financial News: Eurozone GDP Growth Beats Expectations

Eurozone GDP Growth Beats Expectations

(RTTNews) - The euro area economy expanded at a faster pace in the third quarter as France and Spain reported strong growth, while Germany and Italy experienced stagnation, amid a highly uncertain outlook due to the ongoing trade policies and political instability.

Gross domestic product climbed 0.2 percent sequentially in the September quarter, preliminary flash estimate from Eurostat showed on Thursday. Economic growth was expected to remain stable at 0.1 percent.

On a yearly basis, GDP growth eased to 1.3 percent from 1.5 percent in the prior quarter. However, the rate was better than forecast of 1.2 percent.

"While we do expect a gradual acceleration of growth over the coming year, we remain cautious about marking this as the start of a growth spurt, given domestic and global uncertainty," ING economist Bert Colijn said.

Despite political instability and trade tensions, France's economic growth accelerated unexpectedly to 0.5 percent in the third quarter from 0.3 percent in the second quarter.

Spain's economy grew by robust 0.6 percent but weaker than the 0.8 percent expansion seen in the prior quarter.

On the other hand, the German economy stagnated in the third quarter, narrowly dodging a recession. Italy's economy also logged nil growth after contracting in the previous quarters.

Data showed that the EU27 grew at a faster pace in the third quarter, up 0.3 percent sequentially, following a 0.2 percent rise a quarter ago. The annual growth in GDP was 1.5 percent compared to 1.6 percent in the second quarter.

ING economist Bert Colijn said the eurozone has remained far from recession despite all the global and domestic turmoil. However, evidence of real sustained growth acceleration on the back of extra investment promises is not there yet, he noted.

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