Eurozone: Euro area recovery weakens in Q3
December 4, 2013
In the third quarter, Eurozone GDP expanded 0.1% over the previous period (Q2: +0.3% quarter-on-quarter). The result was in line with the flash estimate released by the statistical office (Eurostat) on 14 November and marked the second consecutive expansion following a streak of six periods of contraction - the longest recession in the Euro area's history. On an annual basis, the economy contracted 0.4%, marking a slight improvement over the 0.6% drop recorded in the previous quarter.
The Q3 reading was the result of both stronger domestic demand and a deterioration in the external sector. Private consumption rose 0.1% over the previous quarter, which was down slightly from the 0.2% increase recorded in Q2. Fixed investment edged up from a 0.2% increase in Q2 to a 0.4% rise in Q3, the strongest reading in the last 10 quarters. Overall, domestic demand rose 0.4% over the previous quarter, which was up from the flat reading recorded in Q2.
Exports of goods and services rose 0.2% over the previous quarter, which was down from the 2.1% expansion observed in Q2. Meanwhile, imports grew 1.0% (Q2 2013: +1.6% qoq). As imports outpaced exports, the contribution of net exports to overall growth swung from plus 0.3 percentage points in Q2 to minus 0.3 percentage points in Q3.
FocusEconomics Consensus Forecast panelists expect the economy to contract 0.1% in 2013, which is unchanged from last month's forecast. For 2014, panelists expect the economy to expand 1.1%.
Author: Armando Ciccarelli, Head of Data Solutions