BRUSSELS, Oct 30 — The euro zone economy rebounded more than expected in the third quarter from its coronavirus-induced slump, but the rally is likely to be cut short as countries re-introduce restrictions to stem the second wave of the pandemic.

Gross domestic product in the 19 countries sharing the euro surged 12.7 per cent quarter-on-quarter in the third quarter after contracting 11.8 per cent in the second, according to the European Union’s statistics office, Eurostat. Economists polled by Reuters had expected a 9.4 per cent quarterly rise.

The euro zone average was boosted mainly by France, Italy and Spain, which all registered quarterly growth between 16.1 per cent and 18.2 per cent, EU statistics office preliminary data showed.

Advertisement

Year-on-year, however, euro zone economic output was still 4.3 per cent lower, though an improvement on the 14.8 per cent annual contraction in the previous three months. That beat market expectations of a 7.0 per cent year-on-year decline.

Germany, the euro zone’s biggest economy, grew 8.2 per cent quarter-on-quarter. The increase led Germany to revise its economic forecast for the year to a 5.5 per cent contraction, instead of the 5.8 per cent it had expected earlier.

Consumer prices continued to fall in October, as expected, Eurostat estimated, pulled down by plunging energy costs despite more expensive food, alcohol and tobacco.

Advertisement

Consumer prices in October were 0.3 per cent lower year-on-year, as expected by economists polled by Reuters, the same rate as in September, after a 0.2 per cent month-on-month increase.

Energy prices plunged 8.4 per cent year-on-year, offsetting a 4.3 per cent rise in unprocessed food prices.

Euro zone unemployment was flat in September from August at 8.3 per cent of the workforce, as expected, despite edging higher in absolute numbers by 75,000 people. — Reuters