Eurozone economy stalls in third quarter

Europe’s economy stalled in the third quarter, official data showed on Thursday, leaving it a risk of recession.

According to Eurostat, the statistical office of the European Union, GDP decreased by 0.1% in the Eurozone compared to the second quarter, when it inched up 0.1%.

The final figure matched Eurostat’s initial estimate and consensus.

Year-on-on year, GDP was 0.0% in both the Eurozone and across the wider bloc. Analysts had been expecting a marginal rise, of 0.1%, in the Eurozone.

EU-wide GDP was also flat annually compared to the second quarter, when it inched up 0.1%.

Among member states, Germany – the bloc’s biggest economy – saw GDP contract by 0.1%, reversing the second quarter’s 0.1% gain.

In Spain, GDP grew by 0.3%, while in Italy it nudged up 0.1%. But it fell by 0.1% in France.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: “The Eurozone economy is going nowhere.

“The details show that a fall in inventories was the key drag on growth in the third quarter. This component shaved off 0.3 percentage points from quarter-on-quarter growth, offsetting boosts from consumer spending and government consumption.

“Looking ahead, we think consumer spending growth will slow a tad in the fourth quarter, mainly to mean reversion in France, before a return to growth in 2024 as real income growth recovers.

“Overall, we see GDP falling again in the fourth quarter, by 0.1%, before rebounding slightly in the first quarter, to 0.1%.”

Eurostat also published labour data on Thursday, showing a 0.2% uptick in employment across both the Eurozone and EU in the third quarter. That compares to a 0.1% improvement in the second quarter, for both areas.

Year-on-year, employment improved 1.3% in the Eurozone, down marginally on the previously quarter’s 1.4% increase.