Eurozone economy grows in line with forecasts

The Eurozone economy continued to grow in the third quarter, official data confirmed on Tuesday, although at a notably slower pace than previously seen.

According to Eurostat, the European Union’s statistics office, seasonally-adjusted GDP rose 2.2% in the Eurozone compared with the previous quarter, when it increased 2.1%.

Year-on-year, Eurozone GDP was ahead 3.7% compared to the second-quarter’s 14.2% hike, and up 3.9% across the entire EU.

Both the quarterly and annual rates were in line with consensus.

Among the 19 Eurozone countries, Germany - the bloc’s biggest economy - saw GDP rise 1.8% compared to growth of 1.7% in the previous quarter.

Spain’s GDP grew by 2.0% compared to 1.1% in the second quarter, while France saw GDP rise 3.0% from 1.3%. Italy, however, was marginally down on the previous quarter, with growth easing to 2.6% from 2.7%.

Employment, meanwhile, rose 0.9% in both the Eurozone and EU in the third quarter. The number of employed persons increased 0.7% in the Eurozone in the second quarter, and by 0.8% across the wider bloc.

Year-on-year, employment accelerated 2.0%, ahead of analyst forecasts for 1.6%, from an upwardly revised 1.9% in the second quarter.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: "We don’t have a breakdown across GDP components, but already-available national data support our view that a jump in consumers’ spending and services output drove the increase.

"Looking ahead, business surveys suggest GDP growth is now slowing sharply. We look for growth of just 0.8% quarter-on-quarter in the fourth quarter which, barring any further revisions, would mean that over the year as a whole, the Eurozone economy expanded by 5.0% this year.

"The risks to our forecast are squarely to the downside and include ongoing supply constraints, particularly in the manufacturing sector, slow growth in China, the energy crunch, and rising virus cases."