The Eurozone’s quarterly GDP growth rate rose in the third quarter. This was driven by higher household spending, government support, and inventory growth. The latest Eurostat report shows that the Eurozone’s GDP grew by 0.4% in Q3 2024. This result met analysts’ expectations and was higher than the 0.2% recorded in the previous quarter.
This marks the strongest quarterly growth in the last two years. However, net trade growth capped the overall gains. Imports increased by 0.2%, while exports fell by 1.5%. On a year-on-year basis, Eurozone GDP grew by 0.9%, up from 0.5% in Q2 2024.
Key Economic Factors at Play
Kyle Chapman, FX markets analyst at Ballinger Group, linked the strong growth to a likely 25bps rate cut by the European Central Bank (ECB). He highlighted the economic uncertainty in France and Germany and the role of volatile Irish economic data. Ireland recorded a notable 3.5% growth this quarter, significantly influencing overall trends.
Germany narrowly avoided a recession, with a GDP growth rate of just 0.1%. This was below the 0.2% expected but sufficient to sidestep an economic downturn. Germany continues to face challenges such as reduced competitiveness, slowing growth, and rising energy costs.
The Netherlands’ economy saw a decline, with GDP dropping to 0.8% from 1.1% due to weaker export growth and labour market challenges. Similarly, Italy faced economic struggles due to falling net exports, weakening manufacturing, and reduced consumer confidence.
Meanwhile, Spain’s economy showed resilience, recording a 0.8% growth in line with the previous quarter. A strong labour market, steady consumption, and high tourism numbers drove this performance. France also reported a 0.4% growth for the third quarter.