The euro area recovery is continuing to broaden out

Latest growth data indicate continuation of a strong and stable recovery. Our GDP forecasts remain unchanged.

Euro area headline GDP growth was confirmed at 0.6% q-o-q in Q3.

At the country level, Germany surprised to the upside, posting GDP growth of 0.8% q-o-q in Q3 and beating consensus expectations. The impressive performance was driven by exports and investment in equipment and machinery. Turning to Italy, economic activity strengthened in Q3. After a rise of 0.3% q-o-q in Q2, real GDP expanded by 0.5% q-o-q in Q3, in line with consensus expectations.

All in all, the good performance of most economies was further evidence that the recovery is continuing to broaden out across countries.

Looking ahead, leading indicators such as PMIs remain consistent with a strong and stable expansion of the euro area economy, if at a slightly slower pace than in H1. As a result, we keep unchanged our GDP forecasts of 2.1% for 2017 and 1.7% for 2018, with some residual upside risks.

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