Euro area's GDP dips 0.1%, EU remains stable in Q3 2023

09 Dec '23

3 min read

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Euro area saw a 0.1 per cent GDP dip in the third quarter of 2023, while EU's GDP was stable, following modest growth in Q2.
Malta, Poland, and Cyprus showed GDP growth, while Ireland, Estonia, and Finland declined.
Household consumption rose slightly in both regions, but exports and imports fell.
Employment increased by 0.2 per cent in Q3 2023.

The euro area saw a slight decrease in GDP by 0.1 per cent in the third quarter (Q3) of 2023, while the European Union (EU) maintained stability, showing no change compared to the previous quarter, according to Eurostat's recent estimate. This follows a modest growth of 0.1 per cent in both areas in the second quarter of 2023.

Year-over-year comparisons show a stable GDP for both the euro area and the EU in the third quarter of 2023, marking a shift from the growth rates of 0.6 per cent and 0.5 per cent respectively in the previous quarter.

Among the member states, Malta led the growth with a 2.4 per cent increase in GDP, followed by Poland and Cyprus with 1.5 per cent and 1.1 per cent respectively. In contrast, Ireland, Estonia, and Finland experienced the most significant declines, as per Eurostat.

Household final consumption expenditure showed an upward trend, increasing by 0.3 per cent in the euro area and 0.4 per cent in the EU. Government final consumption expenditure also increased in both regions. However, gross fixed capital formation showed negligible changes. Exports decreased by 1.1 per cent in the euro area and by 1 per cent in the EU (after minus 1.1 per cent in the euro area and minus 1 per cent in the EU). Imports decreased by 1.2 per cent in the euro area and by 1.4 per cent in the EU (after 0.0 per cent and minus 0.1 per cent respectively).

In terms of contribution to GDP growth, household final consumption expenditure was positive, but changes in inventories negatively impacted both the euro area and the EU.

Employment figures brought a glimmer of hope, with a 0.2 per cent increase in the number of employed persons in both regions compared to the previous quarter. Year-over-year data showed a more robust increase in employment, with a 1.3 per cent rise in the euro area and a 1.2 per cent increase in the EU. Lithuania, Malta, and Spain recorded the highest growth in employment, while Estonia, Czechia, and Finland saw declines.

Eurostat's estimate puts the total number of employed persons at 216.6 million in the EU, with 168.7 million in the euro area.

However, productivity saw a downturn. Based on persons, productivity decreased by 1.2 per cent in the euro area and 1.1 per cent in the EU compared to the same quarter of the previous year. When considering hours worked, the decline was similar.

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