Eurozone economic growth slows

Written By Unknown on Kamis, 14 November 2013 | 18.20

14 November 2013 Last updated at 05:44 ET

The economy of the eurozone grew by just 0.1% in the July-to-September period, down from 0.3% growth in the previous quarter.

The weak growth levels being seen in the eurozone are among the reasons why the European Central Bank cut its main interest rate to 0.25% last week.

Earlier, figures showed that France's economy shrank 0.1% in the third quarter of the year.

German growth slowed to 0.3% from 0.7% in the previous quarter.

Figures from Italy showed its economy shrank by 0.1%, after a 0.3% contraction in the second quarter.

Improvements

There were better signs of economic activity from some of the worst-hit countries in southern Europe.

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It's not a surprise, it's not an indicator of decline, it's not a recession"

End Quote Pierre Moscovici French Finance Minister

Spain returned to quarter-on-quarter growth for the first time since the first quarter of 2011, albeit with growth of just 0.1%.

Portugal's economy grew by 0.2% in the quarter.

The recovery across the currency bloc is expected to continue, with 1.1% growth predicted by the European Commission for next year and 1.7% in 2015.

Weak exports

When France's economy grew by 0.5% in the second quarter of the year, it pulled the country out of recession, although economists had not expected that level of growth to be sustained.

Figures from the national statistics agency Insee showed that exports dropped by 1.5% in the third quarter, while business investment fell by 0.6%.

However, France's Finance Minister, Pierre Moscovici, said he still believed the economy would grow by 0.1-0.2% over 2013 as a whole.

"The productive forces are starting up again, production is recovering," Mr Moscovici told French radio.

"We knew the third quarter would mark a pause, it's not a surprise, it's not an indicator of decline, it's not a recession."

Germany's statistics office Destatis also cited weak exports as a factor holding back growth.

"The positive impulses in the third quarter came exclusively from within Germany," Destatis said.

"Private household and public spending were somewhat higher than in the preceding quarter. And investment in equipment and construction also increased compared with the second quarter.

"By contrast, the trade balance put a brake on GDP growth. While imports continued to rise, exports showed little momentum compared with the preceding quarter," it said.


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