Fundamental Comment

Exports, spending push euro area growth to record high

Exports, spending push euro area growth to record high

During the third quarter of the year, the euro zone economy recorded the highest growth rate ever recorded in the summer period, supported by consumer spending rates and the rise in exports, witnessing a recovery after the historic downturn that the economy was exposed due to the negative effects of the Corona pandemic.

The gross domestic product in the euro area during the third quarter of the year recorded in its final reading a growth of 12.5%, which is the highest growth rate since the beginning of compiling data in 1995, after the preliminary reading and expectations witnessed a growth of 12.6%, while the economy contracted 11.7% in the second quarter. 

At the level of the annual reading, the euro zone economy recorded a contraction of 4.3% during the third quarter, compared to the same period last year, while the previous reading witnessed a contraction of 14.7%.

The main reason for supporting growth, according to the readings, was due to the revival of domestic consumption and exports, after the reopening of stores and factories, following the closure decisions due to the Corona pandemic.

Consumer spending increased by 14% in the third quarter, contributing with 1.1 percentage points to the growth rate, compared to the second quarter, which witnessed a decrease in spending by 12.4%.

As for exports, they recorded an increase of 17.1% in the same period after a decrease in the second quarter by 18.9%. Exports contributed with 7.6 percentage points to the growth rate.

On the other hand, the employment rate in the euro area during the third quarter witnessed a decrease of 2.3% at the annual level, compared to the same period last year, after a decrease by 3.0% in the second quarter. At the quarterly level, the employment rate recorded an increase of 1% from a previous decline of 3%.

The levels of the euro rose in a limited way during today's trading against the US dollar, after two sessions of decline. The pair recorded its highest level today at 1.2133, after it opened today's trading at the level of 1.2104, while it is currently trading at the level of 1.2116.

This recovery in the euro’s levels comes in light of improved growth data from the euro zone, in addition to the dollar’s continued negative performance against major currencies.


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