Eurozone GDP surprises on the upside

30th Oct 2024 07:38

(Sharecast News) - Eurozone economic growth accelerated in the third quarter, official data showed on Wednesday, beating expectations.

According to flash estimates from Eurostat, the statistical office of the European Union, seasonally-adjusted GDP grew by 0.4% in the third quarter. In the wider bloc it grew by 0.3%.

That compares to second-quarter growth of 0.2% and 0.3% in the two areas respectively.

Analysts had expected Eurozone GDP growth to be closer to 0.2%.

Among member states, Germany - the region's biggest economy - saw GDP lift 0.2%, better than most analysts had expected. In the second quarter, German GDP fell 0.3%.

Spain reported a 0.8% increase and France an 0.4% uptick, boosted by the summer Olympics. In contrast, Italy's growth was flat.

Ireland saw the biggest growth, at 2%. However, Irish GDP is affected by multinational accounting activity and is notoriously volatile.

Year-on-year, GDP grew by 0.9% in both the Eurozone and wider EU.

Bert Colijn, chief economist, Netherlands, at ING, said: "PMIs have been indicating doom and gloom about the Eurozone economy since May, but third-quarter GDP has come in surprisingly strong.

"The acceleration from 0.2% to 0.4% indicates that worries about an imminent recession are overdrawn.

"Still, don't overestimate the strength on the basis of this better-than-expected growth reading either."

Rabobank said: "There's a stark divergence between the manufacturing and services sector. Industrial performance also varies widely between member states.

"All-in-all, today's key message from the figures is that the slow but gradual recovery remains intact, even as structural challenges in industry and sluggish external demand are likely to keep a lid on the pace of expansion in coming quarters, with the fourth likely to show a fall back in growth after the third quarter uptick."