Eurozone turns a GDP corner | FT Alphaville

Eurozone turns a GDP corner

Huzzah! The Eurozone returned to positive GDP growth in the third quarter, as the below chart courtesy of JP Morgan shows:

Eurozone GDP - JPM

Eurozone GDP rose by 0.4 per cent in quarter-on-quarter, after five consecutive quarters of declines. Economists had expected a 0.5 per cent rise.

And accordingly, here is JP Morgan economist David Mackie looking suitably unimpressed:

The third quarter GDP data suggest that the region has exited recession, but the move was hardly a decisive one. Despite a 12%ar gain in industrial production across the region, GDP managed to increase by only 1.5%ar. Clearly, there was a lot of weakness in construction and services. These data will reinforce the perceptions of the consensus: that the upswing will be lackluster and bumpy. And, they present a major challenge to our more upbeat forecast of growth over the coming year. Indeed, if GDP can only increase by 1.5%ar when IP grows at a double digit pace, the largest gain since 1984, one can only worry about the future.

Ah well.

The GDP rise, incidentally, means that Greece, Spain and possibly Ireland are the only major Eurozone countries still in recession.

Related link:
Eurozone escapes recession after five quarters – FT