Euro zone grows faster than expected in Q3 but outlook remains weak

The euro zone economy grew faster than expected last quarter but threats of exorbitant tariffs from a potential Donald Trump presidency in the U.S., escalating trade tensions with China, and muted consumer confidence keep the outlook weak.

Gross domestic product in the 20 countries sharing the euro grew by 0.4% in the third quarter from the previous three months. Compared to the same quarter a year earlier, the bloc’s expansion picked up to 0.9%, which is still below what economists consider its natural rate of expansion without shocks or stimulus.

Euro zone growth has been hovering just above zero for the past two years as its industrial sector suffered back-to-back blows. Surging energy costs dragged down margins while China’s economic deceleration undermined demand for European goods from traditional customers in China.

Source: reuters.com