Eurozone GDP contracts by 0.1% in third quarter

The Eurozone economy unexpectedly contracted in the third quarter, official figures from Eurostat revealed on Tuesday.

Gross domestic product across the single-currency region fell by 0.1% compared with the second quarter when the economy expanded by 0.1%.

The outturn was worse than expected, with the consensus forecast pointing to GDP stalling. Analysts put it down to the recent contraction in Germany – the only of the Big Four European economies to see an economic deterioration in the third quarter.

Compared with the same period the year before, growth came in at just 0.1%, down from 0.5% in the second quarter and below the 0.2% expansion expected.

"Incoming PMI data suggests that momentum going into Q4 remains exceptionally weak, weighed down by tight financial conditions," said analysts at Oxford Economics.

"The Eurozone economy is set for a period of economic stagnation, with growth only returning once real income growth turns sufficiently positive."