Brussels: Economic growth in the euro zone remained low but stable in the third quarter as inflation rose to a 27-month high amid fears over Brexit and major elections in France and Germany.
The Eurostat statistics agency said growth in the euro zone remained stable in July to September, to 0.3 per cent, which was on par with analysts surveyed by Factset, a data company.
Analysts said the expansion remained low, however, and came on the back of France that shook off a contraction earlier in the year to expand by 0.2 per cent in third quarter.
The growth figure will feed worries that the European economy will fail to bring new jobs or significantly boost inflation.
“The upside for euro zone growth continues to be constrained by a number of fundamental factors, including structural impediments in a number of countries (notably Italy and France) and significant banking sector problems,” said IHS Global Insight’s Howard Archer.
Archer said the perspective for next year remained a particular concern with key elections looming, as well as the launch of tricky negotiations between Britain and the EU after the British vote to leave the bloc.
“The UK’s Brexit vote could impact on euro zone activity in 2017… (as) its likely difficult exit negotiations with the European Union get under way and are in the foreground,” Archer said.
The full 28 members of the European Union meanwhile showed growth of 0.4 per cent in the third quarter, also on par with analyst predictions.
On a 12-month basis, growth in the euro zone stood at 1.6 per cent.
Consumer prices in the euro zone, which dipped in and out of deflationary territory last year, rose a higher-than-expected 0.5 per cent, the highest since June 2014. — AFP