EUROZONE-ECONOMY/GDP Euro zone growth stronger than expected

Record ID: 861988

  • Title: EUROZONE-ECONOMY/GDP Euro zone growth stronger than expected
  • Date: 14th November 2014
  • Summary: GERMANY, (FILE) (REUTERS) MEN WORKING ON BUILDING SITE MAN SLICING PANEL MEN ON YELLOW SCAFFOLDING
  • Embargoed: 29th November 2014 12:00
  • Keywords:
  • Location: France
  • City:
  • Country: France
  • Topics: General
  • Reuters ID: LVA8M8JSZQTOEQLQX5B1BHOJHAI
  • Aspect Ratio:
  • Story Text: The euro zone economy grew more strongly than expected in the third quarter as France beat market forecasts and Germany narrowly avoided a recession, but the bloc remains weak and could need further stimulus.
    European Union statistics office Eurostat said on Friday (November 14) the 18 countries sharing the euro expanded 0.2 percent in July-September compared to the previous three months, when they grew 0.1 percent.
    Year-on-year, euro zone growth was 0.8 percent in the third quarter, the same as in April-June.
    Eurostat confirmed its earlier estimate that euro zone inflation stood at just 0.4 percent in October.
    Economists said growth was still feeble and would probably slow again towards the end of the year. Most still expected the European Central Bank (ECB) to launch further stimulus measures, up to and including a quantitative easing programme buying government bonds.
    "The euro zone has some real structural problems and the one shining light, Germany, seems to be stuttering at the moment. So I think (ECB's Mario) Draghi is certainly going to want a weaker euro and try and get some sort of inflation. There really is a risk of a lost decade like Japan here," the head of trading at ETX capital, Joe Rundle said.
    Europe's biggest economy Germany grew 0.1 percent, in line with expectations and confounding fears of a second quarter of negative growth.
    Sanctions against Russia over the crisis in Ukraine have hit Germany hardest. Rundle said the pressure on Germany was likely to continue.
    "It doesn't look like there is going to be any quick end to the Russian problems. Oil being hit and being very low might actually cause the Russians some serious issues and they might decide to step away from Ukraine to make up for that. So I think Russia is ongoing and Germany is going to carry on stuttering."
    France, the euro zone's No.2 economy, grew 0.3 percent, beating market expectations of a 0.2 percent gain.
    Italy, the euro zone's third biggest economy, contracted 0.1 percent and returned to recession, marking the 13th quarter running without any growth.
    Spain has already reported steady 0.5 percent growth and Greece appears to be turning a corner, emerging from a crippling six-year recession.
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