Economic growth in the 12 countries that make up the euro zone declined to its slowest pace in more than a year in the third quarter of the year as record oil and raw material prices led to a fall in global demand and the strong value of the euro against the dollar hit exports from Europe. Growth, at 1.9%, was down from the previous quarter’s 2%.
The European Central Bank’s President Jean-Claude Trichet warned this week that energy costs are hurting the region’s economy. He said: “Persistently high and rising oil prices have had a visible, direct impact in the euro area, in particular, growth appears to remain limited in the context of ongoing moderate real GDP growth and weak labour markets.” Of the world’s three largest economies – America, Japan and the euro zone – only the US managed to attain accelerated growth in the third quarter of the year. The Euro region was dragged down by Germany and France. The latest figures from Paris show GDP rose by just 0.1% in the third quarter. compared with the previous three months. That was the weakest showing in more than a year and it was mostly due to a fall in consumer spending. The figures suggest the French economy is struggling to create jobs.