Eurozone Q3 GDP Growth Confirmed at Near 4-Year Low


The Eurozone economy grew 0.2 percent on quarter in the three months to September 2018, unrevised from a second estimate and following a 0.4 percent expansion in the previous period. It was the weakest growth rate since the second quarter of 2014 mainly due to a negative contribution from external demand.

From the expenditure side, positive contributions to GDP growth came from inventory changes (0.3 percentage points) and household final consumption expenditure (0.1 percentage points), while gross fixed capital formation and government spending were neutral and net trade subtracted 0.3 percentage points to GDP growth.

Household consumption edged up 0.1 percent in the third quarter, following a 0.2 percent gain in the previous period. In addition, fixed investment rose 0.2 percent (vs 1.5 percent in Q2) and government spending increased also 0.2 percent (vs 0.4 percent in Q2). On the other hand, imports advanced 0.5 percent, after a 1.1 percent climb in the previous period, while exports fell 0.1 percent, compared with a 1 percent surge in Q2.

From the production side, services activity was the main driver of growth supported by trade, transport, accommodation and food service activities (0.2 percent vs 0.5 percent); information and communication (0.9 percent vs 1.4 percent); financial and insurance activities (0.3 percent vs 0.6 percent); real estate activities (0.4 percent vs flat reading); and administration and other public services (0.2 percent, the same as in Q2). Also, construction advanced 0.6 percent (vs 1.1 percent in Q2). By contrast, industry output shrank 0.2 percent (vs 0.4 percent in Q2), dragged by manufacturing (-0.4 percent vs 0.6 percent).

Among the bloc's largest economies, Germany's output contracted 0.2 percent in the third quarter (vs 0.5 percent in Q2), the first output fall since Q1 2015 due to a drop in both exports and household consumption. Also, Italy's economy shrank 0.1 percent (vs 0.2 percent in Q2), the first contraction since Q2 2014, due to declines in investment and private consumption. On the other hand, France's GDP growth rate was the strongest in almost a year (0.4 percent vs 0.2 percent in Q2) and the Spanish economy continued to expand at a solid pace (0.6 percent, the same as in Q2)

Compared with the same quarter of the previous year, the Euro Area economy expanded 1.6 percent in the three months to September, below a second estimate of 1.7 percent and following a 2.2 percent growth in the previous period.

Considering the European Union as a whole, GDP growth eased to 0.3 percent quarter-on-quarter (vs 0.5 percent in Q2); and to 1.8 percent year-on-year (vs 2.1 percent in Q2).


Eurozone Q3 GDP Growth Confirmed at Near 4-Year Low


Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com
12/7/2018 10:26:59 AM