①Preliminary data released by Eurostat on Thursday showed that the Eurozone economy grew 0.2% in the third quarter, slightly higher than market expectations of 0.1%; ②The Q3 growth in the Eurozone was mainly driven by Spain and France, with Spain achieving a 0.6% expansion during the quarter, while France recorded 0.5% growth (far exceeding analysts' expectations of 0.2%) despite political turmoil.
Preliminary data released by Eurostat on Thursday showed that the Eurozone economy grew 0.2% in the third quarter, slightly higher than market expectations of 0.1%.
In annualized terms, Eurozone economic growth reached 1.3%, higher than the expected 1.2%, approaching what economists consider the 'natural growth rate' achievable without stimulus.
The Q3 growth in the Eurozone was mainly driven by Spain and France, with Spain achieving a 0.6% expansion during the quarter, while France recorded 0.5% growth (far exceeding analysts' expectations of 0.2%) despite political turmoil.
However, Germany and Italy dragged down overall growth as both economies stagnated.
Previously, Eurozone economic growth stood at 0.6% in the first quarter but slowed to 0.1% in the second quarter.
"Although the outlook remains subject to significant downside risks, sentiment toward the economy is relatively optimistic overall," said Bert Colijn, an economist at ING Groep. "We expect growth to gradually accelerate over the next year, but caution is still warranted—it should not yet be considered an explosive period of economic recovery."
Despite factors such as trade tensions and external uncertainties potentially continuing to weigh on growth in the coming months, economists remain relatively optimistic overall. The European Central Bank's forecasts also indicate that Q3 may have been the weakest quarter in recent times.
Nevertheless, economists noted that structural rigidity in the Eurozone economy limits overall dynamism, so even if growth rebounds, it will likely remain relatively moderate, with growth rates hovering between 1.2% and 1.5% over the next few years.
Germany remains the 'problem child' of the Eurozone.
Germany has been largely stagnant over the past three years, with its declining industrial competitiveness continuing to label it as the 'problem child' of the eurozone. However, a large-scale fiscal spending plan by the German government is expected to boost growth to some extent.
However, it may take several months or even quarters for these expenditures to flow into the real economy, leaving the country still at risk of weak growth in the short term.
"Leading indicators, including the IFO Business Climate Survey and PMI indices, suggest that Germany's economy will begin to recover in the fourth quarter, but initial momentum will remain weak, linked to geopolitical risks, trade uncertainties, and negative perceptions of the new government’s early performance," said Timo Klein, economist at S&P Global Market Intelligence.
Editor/Doris