Germany up 0.2%, Spain and Netherlands up 0.6%

The EU logo. [Getty Images]
The EU logo. [Getty Images]

The eurozone economy grew faster than expected in the third quarter, shrugging off energy-driven inflation and the fallout from major protests in several member states.

Eurostat, the EU's statistical agency, said Friday (local time) that the eurozone's GDP expanded 0.4% quarter-on-quarter in the third quarter, based on a preliminary estimate. That represents a 1.3% increase from the same period a year earlier.

The pace of growth slowed from 0.6% in the second quarter but was more than double the 0.2% market consensus. Bloomberg said the result showed the European economy had demonstrated considerable resilience despite rising price pressures and a summer marked by heat waves and drought.

Performance varied widely across member states. Germany, the eurozone's largest economy, grew 0.2% quarter-on-quarter, while Spain posted a solid 0.6% gain. Ireland led the bloc with growth of 5.5%, and the Netherlands and Estonia each expanded 0.6%.

Countries gripped by political and social unrest fared poorly. France, which saw a wave of large-scale violent protests sweep the country, contracted 0.1% quarter-on-quarter. Italy, where fierce demonstrations broke out in Milan and other cities, recorded zero growth, leaving its economy stagnant.

Despite the better-than-expected showing, caution remains. Bloomberg noted that authorities are keeping a close watch on downside risks, citing concerns that energy-driven inflation could spread to other sectors and pointing to the political and fiscal instability of France, the eurozone's second-largest economy.

Meanwhile, GDP across all 27 EU member states grew 0.5% quarter-on-quarter and 1.5% year-on-year in the third quarter, according to the preliminary estimate.


hwshin@heraldcorp.com