RegionsEurozone Economic Growth Negligible in Q3

Eurozone Economic Growth Negligible in Q3

Economies in the eurozone, which
emerged from 18 months of recession in the second quarter of 2013 to record
economic growth of 0.3%, saw the rate fall back to just 0.1% in the Q3 period from
July to September.

The weak economic data in the
17-country currency bloc follows the European Central Bank’s (ECB) decision
last week to cut interest rates from 0.50% to 0.25%, the timing of which took
some analysts by surprise.

The figure for the eurozone’s
largest economy, Germany, showed Q3 growth of 0.3% against 0.7% in Q2, while
its second largest, France, recorded a -0.1% contraction after 0.5% growth the
previous quarter. Italy, which ranks third, also showed a -0.1% contraction
although this improved on the Q2 figure of -0.3%.

Spain and Portugal, whose
economies have been particularly hard hit in recent years, provided better
news. Spain returned to quarter-on-quarter growth for the first time since Q111,
albeit of only 0.1%. Portugal’s economy grew by 0.2% in Q3.

The European Commission (EC)
currently predicts growth of 1.1% for the eurozone next year and 1.7% in 2015.
The US is currently growing at an annualised rate of 2.8%, compared with the
eurozone’s rate so far this year of about 0.4%.

Jonathan Loynes, chief European
economist at Capital Economics, commented: “The near-stagnation of the eurozone
economy in the third quarter underlines the fragility of the recovery and the
growing dangers of a damaging bout of deflation in the region.”

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