Eurozone growth slows as Italian economy stalls

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AFP

Economic growth in the 19 countries using the euro currency slowed by more than expected in the third quarter of the year, official figures indicate.

Growth in the eurozone slowed to 0.2%, compared with 0.4% in the previous quarter.

The bloc was not helped by the performance of Italy’s economy, which registered no growth at all during the third quarter.

Growth across all 28 countries of the European Union fell to 0.3% from 0.5%.

The stagnation of the Italian economy comes as the new coalition government is arguing with the European Commission over the need for an expansionary budget to boost growth.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: “This is a sobering number for the new government, though we suspect that it will meet it with fighting talk, at least initially.

“After all, with growth now stalling, fiscal stimulus is needed more than ever, or so at least the argument will go in Rome.”

Waning optimism

Figures from the French statistics agency INSEE showed France’s economy picked up thanks to a rebound in consumer spending.

It grew by 0.4% in the third quarter, compared with 0.2% in the previous three-month period, but the rate was less than forecast, meaning the government may miss its full-year growth targets.

Separately, the European Commission said economic sentiment dropped in the eurozone for the 10th consecutive month.

Its measure of sentiment fell to 109.8 points in October from 110.9 in September – the biggest drop since March.

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