Eurozone economic growth slows in third quarter to 0.3 per cent

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Luxembourg (dpa) – Eurozone economic growth slowed in the third quarter of 2015, coming in at a less-than-expected 0.3 per cent compared with the previous three months, according to data released Friday.

The 19-member currency bloc has struggled to rev up its economic engine after emerging from recession in 2013. Inflation is hovering around zero and unemployment is only gradually falling.

Growth in the eurozone’s gross domestic product (GDP) continued to slip after dropping from 0.5 per cent in the first quarter and 0.4 per cent in the second, according to an estimate by the European Union’s statistics office, Eurostat.

Analysts had expected third-quarter growth to come at an unchanged 0.4-per-cent.

The eurozone’s slow pace of recovery is like “driving with the handbrake on,” noted ING Bank analyst Peter Vanden Houte.

The eurozone’s two largest countries, Germany and France, both grew 0.3 per cent in the third quarter, the data showed, while Spain outperformed them with a 0.8-per-cent increase.

Greece, the country worst affected by the economic crisis, surprised analysts with a less-than-expected quarter-on-quarter contraction of 0.5 per cent.

“Greek GDP is likely to flirt with zero growth this year and next, and thus may avoid a previously forecast heavy recession,” said Barclays bank analyst Apolline Menut.

National data indicated that eurozone growth was being driven mainly by private consumption, analysts noted, while warning that the impact of low oil and commodity prices will wear off.

Exports, meanwhile, are “facing headwinds” due to a growth slowdown in emerging markets, Vanden Houte said.

Year-on-year, growth in the eurozone was 1.6 per cent higher in the third quarter, up from 1.5 per cent in the previous three months, Eurostat said.

In the wider EU, the economy grew an unchanged 0.4 per cent quarter-on-quarter. Year-on-year growth in the 28-member bloc stood at an unchanged 1.9 per cent.

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