According to the advance estimate, euro zone third quarter GDP rose by 0.2% Q/Q, exactly in line with expectations and the same pace of growth as in the second quarter. National data show that the core countries Germany (0.5% M/M) and France (0.4% M/M) kept the euro area out of recession (for now). In both countries, growth picked up in the third quarter after a meagre second quarter. In Belgium and Spain, the economy came to standstill in the three months to September, while the economy contracted in the Netherlands (-0.3% Q/Q) and Portugal (-0.4% Q/Q). A breakdown is not yet available, but growth was probably supported by strong production in July and August. In September, production dropped sharply, a trend that is expected to continue in final quarter and might push the euro area back in (a mild) recession.
In November, the German ZEW index extended its downtrend, dropping for a ninth straight month to the lowest level in more than three years. The headline (expectations) index fell from -48.3 to -55.2, while the consensus was looking for a more moderate decline (to -52.5). The current situation sub-index on the contrary surprised on the upside of expectations, falling less than expected (from 38.4 to 34.2). The ZEW institute added that they expect at least one negative quarter in Germany, but that the situation is still relatively good compared with past recessions.