The bloc of 18 nations which use the single European currency, the Euro, as a whole managed to deliver meagre economic growth in the third quarter of the year, coming in at 0.2%. A number of pundits had been predicting that the bloc would post a contraction in Q3 following the slowdown seen between Q1 and Q2 (0.3 and 0.1% respectively). The figure comes of a low baseline following the Global Financial Crisis, the European Sovereign Debt Crisis and anaemic global demand, generally in recent years. However, the figure is slightly above half of the long-term average quarterly growth that the bloc has produced from 1997 to date – growth over this period has averaged 0.35% (range -2.8 % (Q1 09) to 1.3% (Q2 97)).
The Italian economy has fallen back into recession with a contraction of 0.1%. The Italian economy is the 8th largest in the world and the third biggest in the Eurozone, but it has been flirting with zero growth or contractions for 14 quarters consecutively.
The German economy reversed a Q2 contraction of 0.1% with growth of 0.1% in Q3, but the star turn of this data set was the beleaguered French economy (2nd largest in the bloc) which posted Q3 growth of 0.3%, confounding analysts’ expectations.
Greece emerged from six years of recession in Q1 and posted a relatively impressive growth figure of 0.7% in Q3, however, the size of the Greek economy is only three quarters of its pre-crisis level. Unemployment is still very high in Greece, currently 25.9% (August data).
There is continuing speculation that the European Central Bank will do more to stimulate the Eurozone economy in a bid to boost growth and cut unemployment which runs at an average of 11.5% of the workforce.