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Eurozone Q3 GDP Expands Most On Record

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The euro area economy expanded at the fastest pace on record in the third quarter after shrinking sharply in the preceding period due to the restrictions imposed to contain the spread of coronavirus, preliminary flash estimate from Eurostat showed Friday.

Gross domestic product expanded 12.7 percent on quarter, this was the sharpest growth seen since the series started in 1995. Economists had forecast a quarterly growth of 9.4 percent after falling 11.8 percent in the second quarter.

On a yearly basis, GDP fell 4.3 percent after easing 14.8 percent in the second quarter. GDP was forecast to decline 15 percent.

The EU27 grew 12.1 percent sequentially but fell 3.9 percent from the same period last year.

Among member countries, France recorded the highest increase of 18.2 percent compared to the previous quarter, followed by Spain and Italy. Germany grew 8.2 percent.

Eurostat is set to release next estimate on November 13.

Consumer price data released today showed that inflation remained negative for a third month in October. The harmonized consumer price index decreased 0.3 percent, same as in September.

"The strong third quarter GDP figure will not make much of an impression as a new downturn is almost certainly upon us," Bert Colijn, an ING economist.

With inflation remaining very weak and GDP set to fall again in the fourth quarter, the ECB has started to work on a new monetary stimulus package, the economist added.

Another communiqué from Eurostat revealed that the jobless rate was unchanged at 8.3 percent in September.

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