The region’s GDP withstands the impact of the war, though it is the weakest figure since the first quarter of 2021
The eurozone is resisting the impact of the energy crisis better than expected. Despite recession fears that have plagued the region in recent months, the region’s economy grew by 0.3% in the third quarter of the year, a tenth higher than Eurostat’s forecast in November (0.2 %).
Taking the European Union as a whole as a reference, the data was also better than expected at 0.4%, indicating the resilience of these countries to the consequences of the war in Ukraine thanks to the rise in household consumption over a period that coincides with the summer holidays.
However, you should not increase the clocks on the fly. Growth rates in the Eurozone were five tenths lower than the growth in the second quarter (0.8%). And year-over-year, the activity rate was 2.3%, compared to 4.2% in the previous quarter and 5.5% in the first quarter of the year. The data for the third quarter is also the weakest since the first quarter of 2021.
And it is clear that the countries of the bloc have not yet recovered their pre-pandemic levels of activity, since, taking the fourth quarter of 2019 as a reference (the last full quarter before the outbreak of the health crisis), the GDP of the region was 2.2% higher.
Of the countries for which data were available, the highest quarterly growth was recorded in Ireland (+2.3%), ahead of Cyprus, Malta and Romania (all three +1.3%) and Luxembourg (+1.1%), while the largest decline in GDP was in line with Estonia (-1.8%), Latvia (-1.7%) and Slovenia (-1.4%).
In the case of Spain, GDP slowed its rate of expansion in the third quarter from 1.5% in the previous three months to 0.2%. Germany, in turn, registered growth of 0.4%, three-tenths more than in the second quarter, while France grew by 0.2%, compared to 0.5% in the second quarter, and Italy by 0.5%, compared to 1.1% in the second quarter.
The latest references suggest that the latter part of the year will be somewhat more complex in terms of activity. In fact, both Brussels and the European Central Bank (ECB) foresee a technical recession in the coming months, combined with high inflation “which will remain around the current level of 10% in the coming months”, as assured by the Vice President of the organization, Luis de Guindos, just a few days ago.
With this outlook, the institution’s final meeting of the year, scheduled for December 15, looks more than complicated, with the pundits divided among those who believe the ECB will ease rate hikes for fear of that potential recession – rising 50 basis points – and those who think fighting inflation will remain a priority, which would force another 75 basis point increase.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
