Eurozone Q3 GDP Growth Exceeds Expectations
October 31 2017 - 03:33AM
RTTF2
The euro area economy expanded at a faster than expected pace in
the third quarter and the unemployment rate fell to a more than
eight-year low, while inflation slowed unexpectedly, official data
revealed Tuesday.
Gross domestic product climbed 0.6 percent quarter-on-quarter,
but the rate was slightly slower than the revised 0.7 percent
expansion seen in the second quarter, preliminary flash estimate
published by Eurostat showed.
Economists had forecast the sequential growth rate to ease to
0.5 percent from the second quarter's initial estimate of 0.6
percent.
On a yearly basis, the currency bloc grew 2.5 percent, which was
faster than the 2.3 percent rise logged in the second quarter and
the expected rate of 2.4 percent.
Eurostat releases flash GDP estimates on November 14.
While the expenditure breakdown has not yet been released,
domestic demand has most likely been an important contributor to
growth again, given labor market strength and improving investment
conditions such as higher capacity utilization and improved lending
demand and conditions, Bert Colijn, an ING economist, said.
Preliminary estimate released so far by member nations showed
that France's growth slowed marginally to 0.5 percent from 0.6
percent in the second quarter. Likewise, Spain's GDP grew 0.8
percent, slower than the 0.9 percent expansion seen in the second
quarter.
The EU28 also grew 0.6 percent sequentially and by 2.5 percent
from previous year in the third quarter.
According to preliminary estimate, Eurozone inflation slowed to
1.4 percent in October, while the rate was forecast to remain
unchanged at 1.5 percent.
Core inflation that excludes energy, food, alcohol and tobacco,
moderated to 0.9 percent from 1.1 percent in the preceding month.
The expected rate was 1.1 percent.
The annual fall in inflation was largely driven by a slowdown in
energy price growth, to 3 percent from 3.9 percent. Services cost
grew 1.2 percent after rising 1.5 percent. Meanwhile, cost of food,
alcohol and tobacco, climbed 2.4 percent, faster than the 1.9
percent increase in September.
October's CPI data will have reinforced the European Central
Bank's judgement that its inflation goal is not yet in sight,
Jennifer McKeown, an economist at Capital Economics, said.
In a separate communique, Eurostat said the unemployment rate
reached its lowest level since January 2009. The jobless rate fell
to 8.9 percent in September from revised 9 percent in August.
The number of unemployed decreased by 96,000 from the previous
month to 14.513 million.
The youth unemployment rate came in at 18.7 percent in
September, down from 18.8 percent in August.
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