Eurozone economic growth accelerated to 0.7% in the Q3 despite clouds of financial turmoil, the European Union’s statistics bureau Eurostat estimated on Wednesday.
The quarter-on-quarter figure stood at 0.3% in the previous three months, falling short of expectations. Compared with the same quarter of 2006, the euro zone economy grew by 2.6%, slightly higher than 2.5% in the second quarter. The improvement was driven by sharp rebounds in Germany and France, the two largest economies in the 13-nation bloc sharing the same currency. Both showed quarterly growth rates of 0.7%, while the Netherlands recorded the most robust quarterly growth of 1.8%.
Meanwhile, the 27-nation EU economy also picked up in the third quarter, growing by 0.8% over one quarter and 2.9% over one year. It was 0.5% and 2.8% respectively in the Q2. The strong performance in the Q3 was achieved amid clouds of financial turmoil, hiking oil prices and a soaring euro, which forced the European Commission to trim its economic forecasts for the next two years. Growth in the EU was expected to decelerate from 2.9% this year to 2.4% in both 2008 and 2009, while the euro zone will grow by 2.6% this year, before slowing down to 2.2% in 2008 and 2.1% in 2009, according to the commission.
The new figures for both the EU and the euro zone in 2008 were 0.3%age points lower than those in an previous spring forecast, but economic growth this year seemed to be little affected by the recent turbulence on the financial market, triggered by the sub-prime mortgage crisis in the United States this summer. Analysts were expecting that the financial turmoil, a strong euro and rising oil prices were soon to take their toll on the real economy in the final months of this year as recent economic confidence indicators, which signal future trends, already weakened. (people)