The euro zone economy recorded a contraction in the third quarter, according to today's data, affected by the European Central Bank raising interest rates time after time and the decline of the German economy, but inflation slowed in October.
The European Union's official data agency, Eurostat, reported that the economy of the single currency area, which includes 20 countries, contracted by 0.1 percent during the period from July to September, after recording growth of no more than 0.2 percent in the second quarter.
The numbers reflect the difficulties facing the euro area, including the cost of living crisis and concerns about the decline in demand in the global economy.
Although the euro zone has overcome the shocks resulting from the Covid epidemic and the Ukraine war, concerns are increasing about the economic repercussions of the war between Israel and Hamas.
But the data showed that the performance of the European Union economy, which includes 27 countries, including member states that do not use the euro, was better, recording a quarterly growth of 0.1 percent, according to the French newspaper.
The German economy contracted by 0.1 percent in the third quarter, while Austria also recorded a contraction of 0.6 percent.
As for France, the second largest economic power in the European Union, it recorded growth of only 0.1 percent, while the Italian economy recorded a recession in the third quarter.
Germany has been hit hard by rising energy costs, a declining manufacturing sector and high interest rates designed to control inflation.
Consumer price inflation in the euro zone slowed to 2.9 percent, Eurostat data for October showed, the lowest rate since July 2021 when it reached 2.2 percent.
The figure is lower than the 4.3 percent recorded in September and lower than the expectations of analysts who expected inflation to remain above 3 percent.
The inflation rate is now closer to the European Central Bank's target of 2 percent. Despite the rise in interest rates, the European Central Bank is still committed to the task of controlling inflation.
But signs of economic weakness and price pressures prompted the European Central Bank to keep interest rates unchanged earlier this month after raising them at each of its previous 10 meetings.
Comments