{"id":5370,"date":"2023-11-01T06:13:27","date_gmt":"2023-11-01T06:13:27","guid":{"rendered":"https:\/\/connectwithfund.com\/business\/europes-economy-risks-a-recession-after-output-falls-in-the-third-quarter\/"},"modified":"2023-11-01T06:13:27","modified_gmt":"2023-11-01T06:13:27","slug":"europes-economy-risks-a-recession-after-output-falls-in-the-third-quarter","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=5370","title":{"rendered":"Europe\u2019s economy risks a recession after output falls in the third quarter"},"content":{"rendered":"
\n

\n The euro area economy risks falling into recession later this year after official data Tuesday showed that output shrank slightly in the third quarter.\n <\/p>\n

\n Gross domestic product across the 20 countries that use the euro fell 0.1% in the July-to-September quarter compared with the previous three months, according to an initial estimate published by Eurostat, the European Union\u2019s statistics office.\n <\/p>\n

\n The dip follows a rise of only 0.2% in the April-to-June quarter and highlights the fine line between contraction and growth in the eurozone. GDP was stagnant in the final three months of 2022 and the first quarter of this year.\n <\/p>\n

\n \u201cThe big picture is that the eurozone is struggling. It has only grown by 0.1% over the past year, and the timeliest business surveys consistently point to activity declining at the start of [the fourth quarter],\u201d Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, wrote in a note.\n <\/p>\n

\n The economy, he added, will \u201cremain sluggish\u201d whether or not the eurozone suffers a technical recession, defined as two consecutive quarters of falling GDP.\n <\/p>\n

\n In a more positive development, separate data showed that inflation continued to slow <\/strong>this month, falling below 3% for the first time in more than two years. Consumer prices in the euro area rose 2.9% in October compared with a year ago, down <\/strong>from a rate of 4.3% in September, Eurostat said.\n <\/p>\n

\n \u201cThe decline is mainly due to the fact that the strong increase in energy and food prices in October 2022 was not repeated this year,\u201d said Christoph Weil, senior economist at Germany\u2019s Commerzbank.\n <\/p>\n

\n Core inflation, which strips out volatile food and energy prices, eased <\/strong>to 4.2%, from 4.5% in September.\n <\/p>\n

\n The let-up in inflation <\/strong>will be welcomed by the European Central Bank, which has been hiking interest rates for more than a year to rein in high prices. The ECB kept rates unchanged last week \u2014 ending a run of 10 consecutive rate hikes \u2014 as inflation continues to fall sharply and the economy weakens.\n <\/p>\n

\n The euro area economy has struggled to regain momentum after it was hit by a huge increase in energy prices triggered by <\/strong>Russia\u2019s full-scale invasion of Ukraine in February 2022. Germany, the region\u2019s biggest economy, felt the full force of the impact because of its huge manufacturing sector and reliance on Russian gas at the time.\n <\/p>\n

\n The interest rate hikes that followed, to tame <\/strong>soaring inflation, have further weighed on spending by consumers and businesses.\n <\/p>\n

\n Recent survey data shows that activity in the eurozone\u2019s manufacturing and services sectors has been on a downward trajectory, with demand for goods and services set to weaken further.\n <\/p>\n

\n Even if the region avoids a recession, economists say a meaningful recovery is still some way off.\n <\/p>\n

\n \u201cMomentum going into [the fourth quarter] remains exceptionally weak, weighed down by tight financial conditions,\u201d said Rory Fennessy, an economist with Oxford Economics. \u201cThe eurozone economy is set for a period of economic stagnation.\u201d\n <\/p>\n

\n Official GDP data out of Germany and France \u2014 Europe\u2019s number one and two economies respectively \u2014 supports that view.\n <\/p>\n

\n French GDP grew just 0.1% in the third quarter compared with the previous three months, when it beat economists\u2019 expectations to <\/strong>expand by 0.6%. Output in Germany, meanwhile, shrank slightly in the third quarter.\n <\/p>\n

\n Elsewhere, Spain\u2019s economy continued to grow but at a slower pace than in the previous quarter, while Italy stagnated.\n <\/p>\n

\n Ireland\u2019s volatile GDP plunged 1.8%, contributing to the euro area\u2019s contraction. The region may have otherwise escaped a negative GDP number.\n <\/p>\n

\n \u201cThe economic environment is weakening at the moment, but no sharp recession is in sight either,\u201d said Bert Colijn, senior eurozone economist at Dutch bank ING. \u201cStill, continued economic and geopolitical uncertainty alongside\u00a0the impact of higher rates\u2026 will weigh on economic activity in the coming quarters.\u201d\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The euro area economy risks falling into recession later this year after official data Tuesday showed that output shrank slightly in the third quarter. Gross domestic product across the 20 countries that use the euro fell 0.1% in the July-to-September quarter compared with the previous three months, according to an initial estimate published by Eurostat, the European Union\u2019s statistics office. The dip follows a rise of only 0.2% in the April-to-June quarter and highlights the fine line between contraction and growth in the eurozone. GDP was stagnant in the final three months of 2022 and the first quarter of this<\/p>\n","protected":false},"author":1,"featured_media":5371,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-5370","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nEurope\u2019s economy risks a recession after output falls in the third quarter | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"The euro area economy risks falling into recession later this year after official data Tuesday showed that output shrank slightly in the third quarter.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/connectwithfund.com\/?p=5370\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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