The euro zone economy expanded more strongly than expected between July and September, avoiding the recession that even Germany was widely expected to endure.
Growth in the 20-nation currency bloc accelerated to 0.4%, but economists had expected it to stabilize at 0.2% as France's momentum picks up and Spain remains strong. Germany's surprise 0.2% rise in gross domestic product caught analysts by surprise, but the statistics for the past three months have been revised down significantly.
The weak spot was Italy, where production was unexpectedly flat due to the negative contribution of net trade.
On the inflation front, separate data from Spain shows that consumer price inflation has accelerated slightly towards 1.8%, but remains within the European Central Bank's (ECB) target of 2%. It was shown that there is.
German data is also likely to show an uptick when euro zone-wide economic data is released on Thursday.
Wednesday's figures could allay some of the concerns about Europe's economy that were expressed last week as finance officials gathered in Washington for a meeting of the International Monetary Fund.
Several ECB policymakers said the deteriorating outlook could necessitate a significant rate cut, while others were cautious.
The surprisingly strong growth numbers could support the argument for maintaining a modest pace of easing and sticking with the previous quarter-point reduction in borrowing costs. After the barrage of data, traders abandoned bets on an ECB rate cut, pricing in around a 25% chance of a 0.5 percentage point cut in December. Earlier this month, the implied probability was 50%, according to swap prices.
The biggest concerns center on Germany, where the country's manufacturing industry is suffering from declining competitiveness, which executives blame on high energy costs, overregulation and a lack of skilled staff. Uncertainty has led consumers to increase their savings instead of using the pay increases they received in recent months.
But that may be starting to change, with the country's statistics agency highlighting increases in household and government spending as reasons for growth in the third quarter.
Countries that focus on services are faring better these days. Private-sector production rose even faster in October outside France and Germany, according to S&P Global's Business Survey.
