The third quarter GDP growth rate has been confirmed at 0.6% q/q while rising 2.5% over the year. The index of industrial production fell 0.6% m/m in September, but rose 3.3% over the year at the same time, providing solid support for the growth outlook.
The drivers of the robust economic growth in the Eurozone remain unchanged as the employment picks up, growing global demand support export, the monetary policy stance being ultra-light and improving lending conditions in the environment of a modest inflation. It looks like 2017 will be the strongest year for the Eurozone economy since 2007 in terms of growth.
The solid economic growth rate is supported by strong growth in Europe’s powerhouse, Germany. German growth accelerated to 0.8% q/q in third quarter showing that the unusually long expansion has not lost momentum yet. Italy also rose above expectation at 1.8% y/y in Q3. Dutch growth was in line with expectations at 0.4% q/q after a huge jump in output in the second quarter. With 3.3% y/y growth, Netherlands belongs to the group of top performers in the Eurozone.
Adding to the picture is the positive outlook is that the production going into the fourth quarter remains strong. The forward-looking indicators like purchasing managers surveys point out that the new orders in manufacturing surge and businesses are reporting large backlogs of work. That is making this year’s Eurozone GDP growth at 2.3% rather conservative forecast.
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