Eurozone: Preliminary GDP estimate shows weak economic activity in Q3
November 13, 2015
The economy of the Eurozone continued to grow in the third quarter, although at a more moderate pace than expected. A preliminary estimate released by Eurostat on 13 November showed that GDP increased a seasonally-adjusted 0.3% in Q3 compared to the previous quarter. The result was somewhat lower than both the 0.4% expansion registered in the previous quarter and the 0.4% increase the markets had expected. Compared to the same quarter last year, GDP growth picked up from 1.5% in Q2 to 1.6% in Q3.
Although the preliminary GDP data did not include a breakdown by components, additional data indicated that growth continued to be supported by domestic demand, while growth in the external sector continued to be dampened by external demand weakness in the wake of a deepening slowdown in emerging economies.
Meanwhile, additional country data showed that economic growth in Germany, Italy and Spain moderated in Q3, while activity gained momentum in France. GDP in Germany increased 0.3% quarter-on-quarter in Q3, which was down from the 0.4% expansion observed in Q2. Italy’s economy expanded 0.2% over the previous quarter, which came in slightly below the 0.3% rise tallied in Q2, while Spain’s GDP growth fell from 1.0% in Q2 to 0.8% in Q3. Despite the deceleration, Spain continues to be a clear outperformer among the region’s major economies. Meanwhile, France was an exception. Its economy gained momentum in Q3, increasing 0.3% in Q3, above the flat reading tallied in the previous quarter. In crisis-struggling Greece, given that the hit from capital controls was milder than expected, economic activity contracted only a modest 0.5% in Q3 (Q2: +0.4% quarter-on-quarter). Nevertheless, Greece’s data should be taken with pinch of salt because downward revisions are likely possible at a later stage.
Author: Ricardo Aceves, Senior Economist