Eurozone Q3 GDP Growth Exceeds Expectations
31 October 2019 - 7:38PM
RTTF2
The euro area economy grew more than expected in the third
quarter, despite a global slowdown and uncertainties surrounding
Brexit.
Separate data showed that inflation in the region eased to the
lowest level in nearly three years in October, but core price
growth accelerated, while the jobless rate held steady at the
lowest level in more than a decade.
Gross domestic product expanded 0.2 percent sequentially, the
same rate as seen in the second quarter, preliminary flash estimate
from Eurostat showed Thursday. The economy was forecast to grow 0.1
percent.
On a yearly basis, GDP advanced 1.1 percent, in line with
expectations, but slightly slower than the 1.2 percent growth
posted a quarter ago. Revised data is due on November 14.
The slightly better-than-expected GDP figure does not alter the
fact that the region is expanding at only a very moderate pace,
Andrew Kenningham, an economist at Capital Economics, noted.
What's more, forward-looking indicators, along with the
deteriorating global backdrop, suggest that it will get perilously
close to recession in the coming quarters, the economist added.
The International Monetary Fund forecast the single currency
bloc to grow 1.2 percent this year and then to rebound to 1.4
percent next year.
Last week, the outgoing European Central Bank Chief Mario Draghi
called for active fiscal policy to support monetary policy in
boosting economic growth. He said with fiscal policy, the monetary
policy objective will be reached sooner with less side-effects.
Among big-four economies, Germany has not released its official
GDP data. The Bundesbank said earlier that the largest euro area
economy might have entered a technical recession in the third
quarter though a deep recession is not expected.
France logged a 0.3 percent expansion, the same rate as seen in
the second quarter. Likewise, Spain expanded at a steady pace of
0.4 percent. Italy grew only 0.1 percent, matching its second
quarter growth.
A separate report from Eurostat showed that the jobless rate
held steady at the lowest since July 2008. The unemployment rate
came in at 7.5 percent in September, unchanged from August.
The number of unemployed increased by 33,000 from August to
12.335 million in September.
Meanwhile, the youth unemployment rate rose to 15.9 percent in
September from 15.7 percent in August.
Inflation slowed to 0.7 percent in October following a 0.8
percent in September, flash estimates from Eurostat showed
Thursday. The latest inflation rate was the lowest since November
2016, when it was 0.6 percent.
Meanwhile, core inflation, which excludes energy, food, alcohol
& tobacco, rose for a second straight month, to 1.1 percent
from 1 percent in the previous month.
Inflation has remained away from the ECB's goal of "below, but
close to 2 percent" over several months.
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