Following the further relaxation of pandemic related restrictions, economic growth in the euro area improved in the third quarter, underpinned by the strong performance of France, while Germany lagged behind amid supply bottlenecks.
Gross domestic product grew 2.2 percent sequentially after expanding 2.1 percent in the second quarter, preliminary flash estimate from Eurostat showed on Friday. Economists had forecast the quarterly growth to ease to 2 percent.
On a yearly basis, economic growth slowed markedly to 3.7 percent from 14.2 percent a quarter ago. Nonetheless, the pace of growth was faster than the economists’ forecast of 3.5 percent.
The solid increase in Eurozone GDP in the third quarter means that the recovery phase is now almost complete in most of the euro-zone, Andrew Kenningham, an economist at Capital Economics, said.
Growth will be much slower in the fourth quarter because the boost from reopening has now passed, while supply chain disruption and slowing global demand will take a toll, the economist added.
Among big-four economies, only France’s economic growth accelerated more than expected in the third quarter.
The French economy expanded 3 percent on robust household spending and exports. This was much faster than the 1.3 percent expansion logged in the second quarter and the economists’ forecast of +2.1 percent.
At the same time, Germany grew at a slightly slower pace of 1.8 percent sequentially after the 1.9 percent expansion posted in the previous quarter. Economists had forecast a quarterly growth of 2.2 percent.
Nonetheless, this was the second consecutive expansion after the 1.9 percent decline posted at the start of the year. Destatis said the third quarter growth was mainly attributable to higher household consumption expenditure.
Elsewhere, Italy grew more than expected in the third quarter. GDP was up 2.6 percent sequentially, following the second quarter’s 2.7 percent increase. The expected growth rate was 2 percent.
However, Spain’s economic growth was weaker than expectations. Although GDP expanded 2 percent, faster than the 1.1 percent expansion posted in the second quarter, the rate was below the expected 2.7 percent.
The EU27 logged a sequential growth of 2.1 percent in the third quarter taking the annual expansion to 3.9 percent.