Eurozone: Eurozone grows modestly in Q3
October 31, 2016
The Eurozone’s modest recovery continued in the third quarter, undisturbed by the Brexit vote. According to a preliminary estimate, the Eurozone economy increased a seasonally-adjusted 0.3% in Q3 from the previous quarter, which matched Q2’s reading and met the FocusEconomics panel’s expectations. Compared with the same quarter of 2015, GDP expanded 1.6% in Q3, which was also unchanged from Q2’s result. Q3 was the first quarter to fully incorporate any spillover effects from the United Kingdom’s decision to leave the European Union.
Although the preliminary GDP data did not include a breakdown by components, the Eurozone’s growth story is expected to have remain unchanged. Domestic demand likely remained in the driver’s seat as an improving labor market and expansionary monetary policy support economic activity. Meanwhile, the contribution from the external sector was likely muted as subdued demand weighs on Eurozone exports.
Meanwhile, additional data released by statistical offices across the continent showed that France’s economy rebounded in Q3 after contracting in the previous period. Meanwhile, Spain’s economy continued to grow healthy, although it slowed slightly. Austria’s economy picked up steam, whereas Belgium’s growth moderated. More complete GDP data will be released on 15 November and 6 December.