Schroders Quickview: Eurozone growth remains sluggish

The eurozone economy grew by 0.2% in the third quarter compared to the previous quarter, which was slightly better than consensus expectations of 0.1%. Compared to the same period a year earlier, the eurozone grew by 0.8%.

14 November 2014

Azad Zangana

Azad Zangana

Senior European Economist and Strategist

The performance of individual member states remains very diverse and reflects the progress made in terms of fiscal and structural reforms. For example, Italy is in recession with the economy having shrunk by 0.1%, whereas Spain grew by 0.5% over the same period.


The latest GDP figures continue to paint a picture of a weak eurozone economy that is struggling to break out of this sluggish growth environment. Consequently, inflation remains dangerously low, which will trouble the European Central Bank.

Having contracted in the second quarter, Germany was feared to have slipped into recession given falls in industrial production and retail sales during the third quarter. However, the economy managed to eke out 0.1% growth to avoid a technical recession. Consumer spending appears to have saved Germany as business investment continues to flounder, possibly in reaction to rising tensions between Europe and Russia. Meanwhile, France beat expectations by recording 0.3% growth, although according to the French statistical office, much of that growth was driven by government spending.

In more positive news, Greece was the fastest growing economy in the eurozone, posting 0.7% growth on the quarter and 1.4% growth compared to a year earlier. It appears that the Greek economy has finally stabilised and while there is still a mountain of fiscal and structural reforms that need to be implemented, positive growth will help ease the social problems caused by the crisis.

Overall, while the latest GDP figures are slightly better than expected, they continue to paint a picture of a weak eurozone economy that is struggling to break out of this sluggish growth environment. Consequently, inflation remains dangerously low (confirmed at 0.4% year-on-year for October) which will trouble the European Central Bank. 

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change.  To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.