Eurozone economy grows 0.4% in third quarter

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The Eurozone economy expanded by 0.4 per cent in the third quarter, providing a boost for a region where growth has faltered this year.

While the figure for the three months to September is slightly better than the 0.2 per cent rate anticipated by analysts, the currency bloc’s economy has performed worse than expected over the course of 2024.

Growth fell back to 0.2 per cent in the second quarter, down from 0.3 per cent at the start of the year.

The European Central Bank, which started to cut interest rates in
June, has become increasingly concerned about the sluggishness of economic output, notably in Germany, the region’s manufacturing powerhouse.

The German economy eked out 0.2 per cent growth in the three months to September, defying pessimistic economists who had expected a decline of the same magnitude.

However, the performance of Europe’s largest economy in the second quarter was worse than previously expected — the federal statistics office said on Wednesday that the economy shrank 0.3 per cent in the three months to June, compared with the previous estimate of a 0.1 per cent contraction.

The German Chamber of Commerce and Industry, or DIHK, predicted on Tuesday that economic output would fall by 0.2 per cent in 2024, after declining at 0.1 per cent in 2023. The DIHK also warned that 2025 was likely to be another year with no economic growth.

“We are not just dealing with a cyclical, but a stubborn structural crisis in Germany,” said DIHK managing director Martin Wansleben.

The Olympic Games in Paris this summer boosted GDP in France, with economic growth in the three months to September doubling to 0.4 per cent quarter on quarter, the French statistical office Insee reported on Wednesday morning.

In France, the region’s second-largest economy, growth was driven by an uptick in consumer demand while gross fixed capital formation continued to fall. Foreign trade also contributed to the rise.

While having three more working days than the second quarter, Italy’s economy flatlined in the third quarter, the country’s statistical office said on Wednesday.

Spanish GDP grew by 3.4 per cent in the third quarter from a year earlier, leaving the country on course to be the world’s fastest-growing big advanced economy this year.

The figure marked an acceleration from 3.2 per cent year-on-year growth in the previous quarter. Economists have attributed Spain’s performance to a combination of immigration, tourism, foreign investment and public spending.

Data visualisation by Keith Fray and additional reporting by Barney Jopson in Madrid