Euro zone growth rebounded more strongly than expected in the third quarter thanks to a robust performance by its three biggest economies, data showed today, but economists cautioned a slowdown loomed.
European Union statistics office Eurostat said gross domestic product in the 13 countries using the euro rose 0.7 per cent quarter-on-quarter in the July-September period against 0.3 per cent in the previous three months.
In annual terms the economy grew by 2.6 per cent, up from 2.5 per cent in the second quarter. Economists polled by Reuters had expected quarterly growth of 0.6 per cent and a 2.5 per cent annual expansion.
Expensive oil and a slowdown in home building slowed Greek third-quarter growth to 3.6 per cent in annual terms from 4.1 per cent in the second, a Greek statistics official said.
Germany, the euro zone's biggest economy, led the third-quarter surge with 0.7 per cent quarterly growth fuelled by construction, investment in equipment and private consumption.
While a more detailed breakdown will not be available until November 22nd, economists said stronger domestic demand in Germany was also signalled by a big rise in imports, which wiped out any net contribution from trade in Europe's biggest exporter.
But Bear Stearns economist David Brown pointed out the robust growth data came just a day after Germany's ZEW business confidence index hit a 14-year low, showing vulnerability next year.
France saw its economy expand by 0.7 per cent in the third quarter, its fastest in just over a year, thanks to accelerating private consumption and investment as well as a positive contribution from trade.