The Eurozone economy has inched up in the third quarter of the year, boosted by increased government and household spending, as well as higher inventories.

The third quarter estimate shows economic growth coming in at 0.4% in Q3 2024, according to Eurostat, in line with analyst estimates, and above a 0.2% increase in the second quarter of the year. This reflects the most robust growth seen in the last two years. 

The boost was mainly because of a rise in household spending while inventories and higher government spending also contributed to it. However, net trade capped Eurozone Gross Domestic Product (GDP) growth slightly with imports inching up 0.2%, but exports falling 1.5%. 

On a year-on-year basis, the Eurozone economic growth rate came in at 0.9% in the third quarter, which is in line with market estimates, as well as above the second quarter’s 0.5%. 

Germany avoids recession 

Coming to the biggest economies in Europe, Germany’s GDP grew 0.1%, missing analyst expectations of 0.2%. However, the country has still managed to sidestep a recession. 

That is despite Germany continuing to face a slew of issues such as falling competitiveness, slowing economic growth, a drop in consumer sentiment and more economic and political uncertainty. Higher energy prices and stronger competition from Chinese manufacturers have also contributed to this. 

The Netherlands’ economy decreased to 0.8% in Q3 2024, down from the previous quarter’s 1.1%, mainly because of lower export growth, labour market tightness and falling labour productivity. 

Similarly, dropping net exports also impacted the Italian economy in the third quarter of the year, along with a slumping manufacturing industry and weakening business and consumer confidence. 

Spain’s economy continued to expand, up 0.8% and at the same rate as the last quarter with a robust labour market and consumption contributing to this figure, along with ongoing high tourism numbers. The French economy also grew 0.4%.