Eurozone GDP Q3 2019


Eurozone: Revised data shows the economy gains some pace in Q3 but remains frail nevertheless

January 22, 2020

Revised national accounts revealed that the Eurozone economy gained some pace in the third quarter, although the rate of expansion remained sluggish. According to Eurostat, GDP increased a revised seasonally-adjusted 0.3% in Q3 from the previous quarter (previously reported: +0.2% quarter-on-quarter seasonally-adjusted), above Q2’s 0.2% expansion.

Household spending growth in Q3 accelerated to 0.5% over the previous quarter, from Q2’s 0.2%, amid a low unemployment rate and muted inflationary pressures, cushioning the slowdown in the domestic economy. On the other hand, fixed investment sank 3.8% in Q3 (Q2: +5.2%), swayed by a sharp downturn in fixed investment in Ireland; in the quarter prior, fixed investment growth skyrocketed in Ireland, thanks to multinational-related activity. Government consumption growth, meanwhile, inched down from 0.5% in Q2 to 0.4%.

The external sector’s performance improved. Exports picked up pace in Q3, albeit remained subdued, amid an unsupportive external environment (Q3: +0.7% qoq s.a.; Q2: +0.1% qoq s.a.). Meanwhile, imports fell, again due to data from Ireland, swinging from a 2.7% expansion in Q2 to a 1.2% contraction in Q3.

Compared with the same quarter of 2018, seasonally-adjusted GDP rose 1.2% in Q3, matching Q2’s increase and the previous estimate.

FocusEconomics Consensus Forecast panelists project the Eurozone economy to expand 1.0% in 2020, which is unchanged from last month’s forecast. In 2021, GDP is seen increasing 1.3%.

Author: Massimo Bassetti, Economist

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