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Consumer spending, exports drive euro zone growth to record high

The euro zone economy posted its highest ever quarterly rise in the summer, rebounding from a record contraction caused by the COVID-19 pandemic as consumer spending and exports increased sharply, the EU statistics agency said on Tuesday.

Eurostat said gross domestic product in the 19-country bloc increased by 12.5% in the July-September period from the second quarter, the largest rise since the agency began collecting data in 1995.

This was a slight downward revision from the 12.6% estimate from November. Year-on-year, this amounted to a contraction of 4.3%, slightly above the previous estimate of a 4.4% drop.

The revision was mostly due to a change in the estimates for the second quarter, when the euro zone economy shrank by a record 11.7% on the quarter, against the figure issued in November of 11.8%.

The summer surge was driven by domestic consumption and exports, Eurostat data showed, as shops and factories reopened following lockdowns.

Consumer spending rose by 14.0% in the third quarter from the second, when it fell by 12.4%. Exports increased by 17.1% after an 18.9% drop in April-June.

Eurostat said household consumption contributed 7.3 percentage points the euro zone growth and exports 7.6 points. Government spending contributed 1.1 points.

Most Mediterranean countries posted GDP rises above the bloc’s average, with France, Spain and Italy leading the pack, after record contractions in the previous quarter.

Employment in the euro zone increased by 1.0% in the third quarter after a 3.0% decline in the second, Eurostat said in the same release, slightly revising upwards its previous estimate for July-Sept.
Source: Reuters (Reporting by Francesco Guarascio @fraguarascio; editing by Philip Blenkinsop)

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