While much of the economic world has its eyes on the effect on gross domestic product of a trade war between China and the United States, the world’s other leading economy, that of the European Union, has slowed to a crawl. Based on new data from Eurostat, it would not take much to push the region’s growth to zero.
For the third quarter:
Seasonally adjusted GDP rose by 0.2% in the euro area (EA19) and by 0.3% in the EU28 during the third quarter of 2018, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the second quarter of 2018, GDP had grown by 0.4% in the euro area and by 0.5% the EU28.
Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.7% in the euro area and by 1.9% in the EU28 in the third quarter of 2018, after +2.2% and +2.1% respectively in the previous quarter.
While growth in the third quarter of last year did not come close to matching the United States, it was still a sign of a modestly healthy expansion.
The new data diverge from recent forecasts about the region’s economy. In its October forecast, the International Monetary Fund said that euro area growth would be 2.0% this year and 1.9% next. Those numbers now seem optimistic.
Note: The euro area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The European Union (EU28) includes Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.