Germany's economy grew in the three months to the end of September, ending fears that Europe's biggest economy could slip back into recession.
Predictions that the German economy would contract for the second consecutive quarter proved unfounded, as gross domestic product rose by 0.2% in the third quarter after contracting by 0.3% in the previous quarter.
“This is still far from what we need, but at least it's a ray of hope,” said German Economy Minister Robert Haveck.
Germany's growth boosted the eurozone economy as a whole, with the economy growing by 0.4% in the third quarter, double the 0.2% expected by economists.
Economists said the inflation shock from Russia's invasion of Ukraine, which caused dramatic increases in energy and food prices and hurt business and consumer confidence across the eurozone, was beginning to ease.
“Despite many structural weaknesses, the economy is coming back to life,” said Alexander Kruger, chief economist at private bank Hauck Aufhauser Lampe. This is thanks to consumers letting their guard down a bit. ”
Consultancy Oxford Economics said available information suggests that while most of the eurozone's overall growth comes from household and government spending, investment remains constrained by high interest rates. said.
France's economy grew by 0.4% in the second quarter, up from 0.2% in the second quarter, boosted by the summer Olympics, while Spain grew by 0.8%, largely due to a surge in tourism, establishing itself as Europe's growth hub. .
Italy was the only large European economy to stagnate in the third quarter.
Giorgia Meloni's government has officially predicted that Italy's economy will grow by 1% this year, but Economy Minister Giancarlo Giorgetti said this month that the target would not be met after downwardly revised estimates for the first and second quarters. He said it was possible.
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Kamil Kovar, senior economist at Moody's Analytics, said the figures put to rest any doubts about whether the eurozone was in recession. “That is not the case, and such concerns were always exaggerated.
“However, it is clear that investment remains weak, suggesting that concerns about the outlook are not completely unfounded.
“With today’s announcement and the recovery in inflation, [a] A major interest rate cut is planned at the European Central Bank meeting in December, and investors remain skeptical about expectations for a rate cut in January. ”
