Expansion in Germany and France helped to keep the European economy growing in the third quarter, official data showed on Tuesday, even as the euro crisis makes it increasingly probable that the good times will soon come to an end.
Third-quarter real gross domestic product (GDP) grew 0.2 per cent from the previous three months in both the 17 euro zone nations and in the 27 nations that make up the European Union, Eurostat, the statistics agency, said in Luxembourg. That was the same pace at which GDP had grown in the second quarter. From a year earlier, seasonally adjusted GDP increased by 1.4 per cent in both zones.
By way of contrast, the US economy grew by 0.6 per cent in the third quarter from the second, while the Japanese economy grew by 1.5 per cent.
It was Germany where the momentum was most pronounced, with output lifted by household spending and by businesses investing in machinery and equipment. Real, seasonally adjusted gross domestic product rose 0.5 per cent from the second quarter’s 0.3 per cent growth, and 2.5 per cent from a year earlier, the Federal Statistical Office said in Wiesbaden. The second-quarter figure was revised up from the previously reported 0.1 per cent.
In Paris, the French statistics institute, Insee, reported that the French economy grew by 0.4 per cent in the third quarter, returning to growth after a 0.1 per cent decline in the second quarter, as households spent more and industrial production rose. From a year earlier, the French economy grew 1.6 per cent. The second quarter figure was revised from the previous report, which showed growth as flat.
The preliminary data do not reflect growing evidence of a slowdown that began emerging this autumn.
Confidence is ebbing in Germany, according to a report on Tuesday from the ZEW institute. The institute’s economic sentiment indicator declined in November for a ninth straight month, dropping 6.9 points to minus 55.2 points, well below the historical average of 25.0 points and the lowest since the dark days of October 2008.
“World trade is weakening and the public debt problems in the euro zone and in the United States weigh heavily on business activity,” Wolfgang Franz, ZEW’s president, said in a statement. “These risks could even gain more importance and thus could further harm economic growth in Germany.”
Citing painful budget-balancing measures that will weigh on growth, the European Commission last week cut its growth forecast for the 17 euro zone nations to 1.5 per cent this year and to 0.5 per cent in 2012.
Olli Rehn, the European commissioner for economic and monetary affairs, said last Thursday that the European Union’s economic recovery “has now come to a standstill, and there is a risk of a new recession.”
Eurostat, the statistical office of the European Union, reported last Wednesday that euro zone industrial production fell a steep 2.0 per cent in September from August. The danger was reflected in a report Tuesday from Statistics Netherland showing that the Dutch economy shrank 0.3 per cent in the third quarter from the previous three months — as well as in the sputtering output of the third- and fourth-largest euro zone economies, Italy and Spain.
©2011 The New York Times News Service
