March 28, 2024

European Economy Grew Slightly in 3rd Quarter

Third-quarter real gross domestic product grew 0.2 percent from the previous three months in both the 17 euro-zone nations and in the 27 nations that make up the European Union, Eurostat, the statistics agency, said in Luxembourg. That was the same pace at which G.D.P. had grown in the second quarter. From a year earlier, seasonally adjusted G.D.P. increased by 1.4 percent in both zones.

By way of contrast, the U.S. economy grew by 0.6 percent in the third quarter from the second, while the Japanese economy grew by 1.5 percent.

It was Germany where the momentum was most pronounced, with output lifted by household spending and by businesses investing in machinery and equipment. Real, seasonally adjusted gross domestic product rose 0.5 percent from the second quarter’s 0.3 percent growth, and 2.5 percent from a year earlier, the Federal Statistical Office said in Wiesbaden. The second-quarter figure was revised up from the previously reported 0.1 percent.

In Paris, the French statistics institute, Insee, reported that the French economy grew by 0.4 percent in the third quarter, returning to growth after a 0.1 percent decline in the second quarter, as households spent more and industrial production rose. From a year earlier, the French economy grew 1.6 percent. The second-quarter figure was revised from the previous report, which showed growth as flat.

The preliminary data do not reflect growing evidence of a slowdown that began emerging this autumn.

Confidence is ebbing in Germany, according to a report Tuesday from the Z.E.W. institute. The institute’s economic sentiment indicator declined in November for a ninth straight month, dropping 6.9 points to minus 55.2 points, well below the historical average of 25.0 points and the lowest since the dark days of October 2008.

“World trade is weakening and the public debt problems in the euro zone and in the United States weigh heavily on business activity,” Wolfgang Franz, Z.E.W.’s president, said in a statement. “These risks could even gain more importance and thus could further harm economic growth in Germany.”

Citing painful budget-balancing measures that will weigh on growth, the European Commission last week cut its growth forecast for the 17 euro-zone nations to 1.5 percent this year and to 0.5 percent in 2012.

Olli Rehn, the European commissioner for economic and monetary affairs, said last Thursday that the European Union’s economic recovery “has now come to a standstill, and there is a risk of a new recession.”

Eurostat, the statistical office of the European Union, reported last Wednesday that euro-zone industrial production fell a steep 2.0 percent in September from August. The danger was reflected in a report Tuesday from Statistics Netherland showing that the Dutch economy shrank 0.3 percent in the third quarter from the previous three months — as well as in the sputtering output of the third- and fourth-largest euro-zone economies, Italy and Spain.

Italy’s economy is expected to shrink in the final quarter of 2011, the commission predicted.

Spain, with an unemployment rate of more than 20 percent, is also struggling. On Friday, the INE statistics institute in Madrid said the economy had stalled, growing not at all in the third quarter from the second, and had inched up only 0.8 percent from the third quarter of 2010.

Looking at the limited data available early Tuesday, Jonathan Loynes, an economist in London with Capital Economics, wrote in a research note that it appeared “with export growth generally slowing, it looks like domestic demand in the core economies might have picked up a bit.”

But the data are “all history,” he said. More forward-looking indicators, “suggest that the euro-zone economy is likely to drop back into recession” in the fourth quarter of 2011 “and beyond,” and risks even to gloomy forecasts “are shifting rapidly to the downside.”

Article source: http://www.nytimes.com/2011/11/16/business/global/european-economy-grew-0-2-percent-in-3rd-quarter-helped-by-france-and-germany.html?partner=rss&emc=rss

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