Rising interest rates and a slowdown in the global economy are damping growth in the 12 countries that use the euro. The latest figures showed that euro zone economic growth was weaker than expected in the third quarter; however the region is still on course for its strongest economic expansion in six years.
GDP was up by 0.5% from the previous quarter when it grew 0.9% according to the first estimate from Eurostat, the European Union’s statistics office. It rose by 1.4% during all of last year. The surprise stagnation by the French economy – which reported zero growth in the three months through to September – was a major factor.
France, which was the first euro nation to report quarterly growth, enjoyed increased hiring which boosted spending and investment. It was heading for its fastest annual expansion since 2000 before being affected by a widening trade deficit and a slowdown in manufacturing as interest rates rose and demand for exports cooled.
Germany registered growth of 0.6%, a sharp slowdown from the 1.3% in the previous three months. The euro zone’s biggest economy has now experienced seven successive quarters of growth, but the ZEW economic research centre’s latest index of investor confidence fell again this month, to its lowest in 13 years.