Eurozone Q3 GDP Slows to 0.4% but Beats Forecasts as France Unexpectedly Contracts

• Eurozone Q3 GDP grows 0.4% q/q, slowing from 0.6% but beating 0.2% forecast
• France unexpectedly contracts 0.1% q/q, versus expected 0.1% gain
• Spain Q3 GDP rises 0.6% q/q, in line with expectations, down from 0.7%

Eurostat reported that eurozone GDP grew 0.4% q/q in Q3, down from 0.6% in Q2 but above the 0.2% forecast in a Reuters poll. ING described growth as still well above trend, with the economy appearing to hold up despite the Middle East conflict and a worsening energy shock.

France’s preliminary GDP fell 0.1% q/q, against expectations of a 0.1% gain and after flat growth in Q2 and a 0.2% contraction in Q1. Annual growth was reported at a forecast of +0.3% y/y versus a prior +0.5%. Household consumption improved to 0.4% from 0.2%, but investment fell 0.6% after a 0.5% decline. CNBC linked the weakness to nationwide unrest and pressure from rising bond yields amid investor concern over the deficit.

Spain’s Q3 GDP rose 0.6% q/q, in line with forecasts and slightly below the prior 0.7%, while annual growth was 2.7% against 2.6% previously. Commentary noted that Spain continues to outperform larger euro area peers, though inflation pressures there are building. The mixed national picture arrives after the ECB’s recent policy meeting and as German Q3 growth came in at 0.2%.