The euro area economy posted a better-than-initially estimated growth in the third quarter on household spending and investment, but the revision little changes the bleak outlook for a recession in the coming quarters.
The 19-member currency bloc grew an upwardly revised 0.3 percent sequentially, but the pace was slower than the 0.8 percent expansion logged in the second quarter, detailed quarterly national accounts from the statistical office Eurostat revealed on Wednesday.
The quarter-on-quarter growth was revised marginally from 0.2 percent reported earlier.
The annual economic growth for the third quarter was upgraded to 2.3 percent from 2.1 percent. Nonetheless, this was weaker than the 4.2 percent growth seen in the second quarter.
The Organisation for Economic Co-operation and Development, or OECD, recently projected Eurozone real GDP growth at 3.3 percent this year and only 0.5 percent in 2023 owing to Russia’s invasion of Ukraine, monetary policy tightening and the global slowdown.
The Paris-based think tank projected euro area growth to rebound to 1.4 percent in 2024.
The expenditure-side breakdown showed that gross fixed capital formation and private consumption underpinned growth, while net contribution from foreign trade acted as a drag on economic output.
Household spending registered an increase of 0.9 percent, which was slower than the 1.0 percent rise in the second quarter. Meanwhile, government spending edged up 0.1 percent, offsetting a 0.1 percent fall a quarter ago.
Gross fixed capital formation rose 3.6 percent after a 0.9 percent rise in the preceding period.
Growth in exports held steady at 1.7 percent, while imports advanced 4.3 percent, which was almost double the 2.2 percent rise a quarter ago.
Eurostat data showed that Eurozone employment increased 0.3 percent from the preceding quarter, when it rose by a similar 0.3 percent. The third quarter rate was revised from 0.2 percent.
Annually, the euro area employment growth slowed to 1.8 percent, instead of 1.7 percent, from 2.6 percent in the second quarter.
The EU27 GDP climbed 0.4 percent quarterly, up from the prior estimate of 0.2 percent. The annual growth figure was raised to 2.5 percent from 2.4 percent.
Among the member states of EU, Ireland registered the highest growth of 2.3 percent compared to the previous quarter, followed by Cyprus, Malta and Romania all logging 1.3 percent expansion. Meanwhile, Estonia, Latvia and Slovenia reported bigger contractions.