The euro zone economy expanded by 0.4% in the third quarter of 2024, as per preliminary data released by the European Union’s statistical agency on Wednesday.
This growth surpassed expectations from economists surveyed by Reuters for an anticipated 0.2% increase, following a 0.3% growth in the previous quarter. Notably, Spain showed one of the highest growth rates with a 0.8% increase from the previous quarter, while Ireland, known for its fluctuating figures due to a high presence of international corporations, experienced a 2% rise. Germany, the largest economy in the eurozone, unexpectedly recorded a 0.2% growth in Q3, preventing the recession that some analysts had predicted, amidst challenges in its critical manufacturing sector.
Amid persisting signs of weak economic activity in the euro area, the European Central Bank (ECB) reduced rates for the third time in 2024 during its October meeting, responding to the final reading of September’s headline inflation at 1.7%. The ECB highlighted ongoing sluggish activity across the euro zone as a significant factor behind the rate cut decision. Markets are pricing in an additional 25-basis-point cut from the ECB at its upcoming December meeting, with the current deposit facility rate standing at 3.25%.
