By Laurie Laird
LONDON (MaceNews) – The Eurozone economy staged a stunning rebound in the third quarter, exceeding analysts’ forecasts, even as inflation remained in negative territory for the third straight month ahead of an expected Covid-related slowdown in the closing months of the year.
Gross domestic product soared by a record 12.7% in the July-August period, reversing an 11.8% slump in the second quarter. European Central Bank President Christine Lagarde hinted at a “double-digit” rebound following Wednesday’s Governing Council meeting.
However, Eurozone output remained 4.3% below the level recorded in the same period of 2019, and the region’s central bankers have warned of more economic pain to come, as European governments impose stringent lockdowns as a second wave of the coronavirus ripples over the continent. “Suddenly we have taken a turn for the worst,” said Yves Mersch, a member of the ECB’s Governing Council, at a banking conference earlier on Friday.
Still, the Eurozone rebound outpaced the US, where GDP expanded by 7.4% on a quarterly basis, according to data released on Thursday.
France boasted the sharpest rebound amongst countries reporting on Friday, with output jumping by 18.2%. Spanish GDP expanded by 16.7%, while Italian growth hit 16.1%. German GDP rose by an higher-than-expected 8.2%, but remained 4.3% below year-ago levels.
Inflation remained stubbornly in negative territory, falling by 0.3% in October, according to a flash estimate released by Eurostat on Friday. That’s the third month of sub-zero inflation, following a 0.3% decline in September and an 0.2% slump in September.
Unemployment in the eurozone rose by 75,000 in September, but that wasn’t enough to lift the jobless rate, which steadied at 8.3%, breaking a four-month run of increases. Unemployment increased by almost 1.4 million over the same month of last year, when the jobless rate stood at 7.5%.