The region’s GDP is resisting the impact of the war, although it is the weakest figure since the first quarter of 2021
The euro zone is resisting the impact of the energy crisis better than expected. Despite the fears of recession that have plagued the region in recent months, the region’s economy grew by 0.3% in the third quarter of the year, one tenth above the figure forecast by Eurostat in November (0.2% ).
If the European Union as a whole is taken as a reference, the data was also better than anticipated, at 0.4%, evidencing the resistance of these countries to the impact of the war in Ukraine thanks to the rise in household consumption in a period that coincides with the summer holidays.
However, you should not raise the bells on the fly. The growth data in the euro zone was five tenths lower than the growth in the second quarter (0.8%). And in year-on-year terms, the rate of activity was 2.3%, compared to 4.2% in the previous quarter and 5.5% in the first quarter of the year. The data for the third quarter is also the weakest since the first quarter of 2021.
And it is clear that the countries of the bloc have not yet recovered their level of activity prior to the pandemic, since, if the fourth quarter of 2019 is taken as a reference (the last full quarter before the outbreak of the health crisis), the GDP of the region was 2.2% higher.
Among the countries for which data were available, the highest quarterly growth was recorded in Ireland (+2.3%), ahead of Cyprus, Malta and Romania (all three +1.3%) and Luxembourg (+1.1% ), while the largest falls in GDP corresponded to Estonia (-1.8%), Latvia (-1.7%) and Slovenia (-1.4%).
In the case of Spain, GDP slowed its rate of expansion in the third quarter to 0.2% from 1.5% in the three previous months. For its part, Germany registered growth of 0.4%, three tenths more than in the second quarter, while France grew 0.2%, compared to 0.5% in the second quarter, and Italy 0.5%, compared to 1.1% in the second quarter.
The latest references suggest that the final stretch of the year will be somewhat more complex in terms of activity. In fact, both Brussels and the European Central Bank (ECB) foresee a technical recession in the coming months, combined with high inflation “which will continue around current levels of 10% in the coming months”, as assured by the vice president of the organization, Luis de Guindos, just a few days ago.
With these perspectives, the last meeting of the year of the institution scheduled for next December 15 seems more than complicated, with the experts divided among those who believe that the ECB will loosen up on rate hikes due to fear of that possible recession – with a rise of 50 basis points – and those who think that the fight against inflation will continue to be a priority, which would force another rise of 75 basis points.
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