People walk along the beautiful Alcalá street on a very hot evening in Madrid, Spain.
Miguel Pereira Getty Images News | Getty Images
The euro zone economy grew by 0.4% in the third quarter, flash figures published by the European Union’s statistics agency showed on Wednesday.
Economists polled by Reuters expected growth of 0.2%. after a 0.3% block expansion in the second quarter.
Spain recorded one of the highest growth rates, increasing by 0.8% in the previous quarter, as Ireland – which generally recorded volatile figures due to the high proportion of international companies located there – increased by 2%.
The euro zone’s largest economy, Germany, recorded a surprise growth of 0.2% in the third quarter. That allowed Europe’s largest economy to avoid a recession that some economists had predicted, as it struggled with a slump in its key manufacturing sector.
“Even if a recession is technically avoided, the German economy remains larger than at the start of the pandemic,” analysts at ING said in a note on Wednesday, calling the country a “magnet for negative macro news.”
Analysts say euro zone business activity and consumer confidence should be cautious in the coming months, amid lower interest rates and cooling inflation.
The European Central Bank cut rates for the third time this year at its October meeting, after headline inflation took hold 1.7% in September, according to the last reading. The ECB cited persistent signs of weak activity in the euro area as a key factor in the central bank’s decision to implement the October cuts.
Markets are already bracing for another 25 basis point cut from the ECB at its year-end meeting in December.
This is the latest news and will be updated shortly.
