Euro zone third-quarter economic growth steady as expected

GDP in 19 countries unchanged at 0.3% and inflation up as energy prices decline slows

People sit in a coffee shop in a luxury goods department store in Friedrichstrasse,   Berlin.  Consumer prices  in the euro zone rose 0.5 per cent year-on-year in October, but the European Central Bank would like inflation to be higher. Photograph: Fabrizio Bensch/Reuters
People sit in a coffee shop in a luxury goods department store in Friedrichstrasse, Berlin. Consumer prices in the euro zone rose 0.5 per cent year-on-year in October, but the European Central Bank would like inflation to be higher. Photograph: Fabrizio Bensch/Reuters

Euro zone economic growth was unchanged in the third quarter from the second as expected and inflation picked up in October due to a smaller decline in energy prices, preliminary data showed on Monday.

The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.3 per cent quarter-on-quarter in the July-September period, the same as in the second quarter.

In year-on-year terms, the euro zone economy expanded 1.6 per cent, also the same as in the second quarter and in line with expectations of economists polled by Reuters.

Consumer prices rose 0.5 per cent year-on-year in October, Eurostat estimated, picking up from 0.4 per cent in September and 0.2 per cent in August as the drag on the index from energy diminished.

READ MORE

Energy prices were only 0.9 per cent lower in October than 12 months earlier, compared to 3.0 per cent lower in September, 5.6 per cent lower in August and 6.7 per cent lower than in July.

However, excluding the most volatile prices for unprocessed food and energy, inflation was 0.7 per cent year-on-year, down from 0.8 per cent in the previous five months.

The European Central Bank wants inflation to be higher -- close to 2 per cent over the medium term -- and it has been buying euro zone government bonds on the secondary market to inject more cash into the banking system and make banks lend the money to the real economy.

Reuters