Although forecasts for the Eurozone have been all doom and gloom as of late, with Germany at the centre of these pessimistic predictions, Germany itself has actually managed to avoid recession with a growth of 0.1% in the third quarter of the year meaning that it avoided shrinking like it did in the previous quarter.
The Growth from Germany, alongside France’s stronger than expected growth of 0.3% as well, managed to push the Eurozone forward to 0.2% growth collectively in the quarter.
Greece saw some very impressive growth as it managed to emerge from recession during the first quarter of the year with 0.8% growth. It then posted a 0.3% growth in the second quarter of the year and then a 0.7% growth in the third quarter which means, although the Greek economy is still well below its pre-crisis levels, it is growing with some impressive speed making it the fastest growing economy in the Eurozone. Italy, however, was not so lucky with a contraction of 0.1% meaning that it once again returned to recession.
The Eurozone figures are an improvement on the 0.1% growth seen in the second quarter of the year and there is hope that stimulus measures introduced by the European Central Bank can help stave off deflation in the economic bloc and spur on further growth across all of the member states.
Nancy Curtin, chief investment officer of Close Brothers Asset Management, said of these figures:
“On their own, these growth figures are nothing to write home about, but in the context of the negative news emerging from the Eurozone in recent months, the simple fact that growth isn’t slowing will reassure investors. But let’s be clear, the outlook for the Eurozone is still heavily clouded. Inflation remains in the doldrums, employment across the bloc is not improving, and manufacturing is in a state of near stagnation.”
Germany’s statistics have come as a surprise to many who had forecast possible recession for the leading member state but it appears that domestic spending has increased strongly along with exports also increasing. After these latest figures were produced, a panel of advisers to the German government forecast growth of 1% next year following a 1.2% expansion in 2014.
French President Francois Hollande was buoyant about the country’s unexpected growth and said that France could reach a new target of 0.4% growth for the whole year.
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