Eurostat said Eurozone GDP rose 0.4% QoQ in Q3, beating economists' 0.2%
forecast and below Q2's unusually strong 0.6%. YoY growth was 1.3% versus a 1.1%
estimate, roughly at potential growth. Investment and consumption remained
resilient, offsetting pressure from high energy prices. Large-scale spending on
AI, defence and infrastructure boosted investment; strong external demand
supported industrial output; households maintained consumption and trimmed an
already-high savings rate. Markets have revised up growth forecasts: most
forecasters now expect Eurozone growth above 1% this year and a pickup in 2027.
The expansion, while still less than half the pace of the US, is markedly
stronger than the pessimistic scenarios priced in after the outbreak of the Iran
war.
