Eurozone continues to grow at snail’s pace

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The eurozone economy grew more strongly than expected in the third quarter as France beat market forecasts and Germany narrowly avoided a recession, but the bloc remains weak and could need further stimulus.

European Union statistics office Eurostat said the 18 countries sharing the euro expanded 0.2 per cent in July-September compared to the previous three months, when they grew 0.1 per cent.

Year-on-year, eurozone growth was 0.8 per cent in the third quarter, the same as in April-June.

“The eurozone economy is still growing, albeit at snail’s pace,” said Nick Kounis, economist at ABN AMRO. “A slow recovery rather than a third recession looks to be on the cards.”

Eurostat confirmed its earlier estimate that eurozone inflation stood at just 0.4 per cent in October.

Economists said growth was still feeble and would probably slow again towards the end of the year. Most still expected the European Central Bank to launch further stimulus measures, up to and including a quantitative easing programme buying government bonds.

“The recovery remains fragile and subdued,” Barclays said in a research note. “In this context, we continue to believe that the ECB will be forced to provide further stimulus... by the end of Q1 2015.”

Recent survey data suggest the eurozone will continue to struggle.