(MENAFN– ecpulse) The euro-area economy grew at a slower pace in the third quarter, underlining concerns over the region’s economic outlook one day ahead of the European Central Bank December’s policy meeting, Eurostat official preliminary data showed Wednesday.
Growth in the 17-nation region was affected by the escalating debt woes, which prompted European leaders to launch severe austerity measures to trim the huge budget deficit, along with the slowdown in global growth.
In a report, Eurostat said the Eurozone economy expanded by 0.1 percent in the three months to September, unrevised from flash estimates, yet slowing from the 0.3 percent growth achieved in the second quarter when the euro zone exited a recession.
The Eurozone economy contracted at an annual rate of 0.4 percent in the third quarter, also unrevised from the preliminary reading released earlier in the month. GDP shrank at a rate of 0.6 percent in the previous quarter.
The figures gave weight to fears that high unemployment, low inflation and disagreements among political leaders over further moves towards integration will keep the currency zone locked into a prolonged period of low growth.
Details with the release showed household consumption fell to 0.1 percent as expected from 0.2 percent a quarter ago. Gross fixed capital formation advanced to 0.4 percent from 0.3 percent in the second quarter, beating 0.2 percent expected.
On the downside, government expenditure dropped to 0.2 percent from 0.4 percent revised to 0.0 percent a quarter ago.
The ECB decided last month to lower rates by 25 bp to a new record low of 0.25% to boost the sluggish growth pace. Investors will be looking forward to the ECB last policy meeting for 2013 tomorrow, with markets expecting the bank to leave its monetary policies unchanged.
Draghi said last month that the economy will gradually recover at subdued pace later this year, where policy stance should support domestic demand. Recent confidence indicators show signs of improvement from low levels and tentatively confirm signs of recovery.
The November Markit survey of purchasing managers across the Eurozone remained at a level consistent with just 0.1% quarterly GDP growth.
Manufacturers fared better this month, helped by the fastest rise in new export orders since May 2011. Markit`s Eurozone Manufacturing PMI rose to 51.5 in November from October`s 51.3, its best showing in the five months since factories broke their almost two-year run of declining activity.
The Eurozone composite of manufacturing and services showed a slightly better expansion in November than previously thought yet below October’s figures.
A Composite of both manufacturing and services came at 51.7, still lower than October’s 51.9, which was the highest since June 2011 while services PMI dropped to 51.2 from 51.6 in October.
Separately, euro-area retail sales eased to 0.2 percent decline in October from 0.6 percent drop in the preceding month, while from a year earlier the reading dipped 0.1 percent.
In the FX market, the EURUSD pair was little changed versus the dollar in early trades, trading at 1.35916 after the pair started at 1.35850. The pair has so far touched a high of 1.35970 and a low of 1.35818.
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