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.”