Eurozone GDP in the third quarter increased by 0.4 percent compared to the second quarter of this year. This is a clear acceleration (from 0.2%) and at the same time the best data in two years. Year-on-year (i.e. compared to the third quarter of 2023), the Eurozone economy grew by 0.9%. (seasonally adjusted). Throughout the European Union GDP growth amounted to 0.4 percent quarter to quarter and 1 percent year to year and this is also acceleration.
The EU economy is growing. Where does this growth come from?
The report that Eurostat (the EU's statistical office) published on Friday is now final, so we also know the components of GDP. It follows from them that finally European consumers started shopping. Private consumption rose the most in two years. Clearly Another economic engine has also grown: investments. The indicator was dragged down by exports.
Okay, but what does the ranking of leaders and laggards look like? On a quarter-to-quarter basis, it is unrivaled Ireland, whose GDP increased by as much as 3.5 percent (we will write a little more about this country later in the text), further there are Denmark (also very interesting) and Lithuania with +1.2 percent In turn, they had the largest quarterly decline in GDP Hungary (-0.7%) i Latvia (-0.2%). And where is this? Poland? Unfortunately, also in the tail. Compared to the second quarter, we also noted GDP decline, by 0.1 percenttogether with Austria and Romania. Five EU countries, including ours, are below the line (and Italy recorded zero growth).
What is happening to the Polish economy?
The order in the list changes if you look at annual approach (i.e. comparison of the third quarters of 2024 and 2023), but Poland it doesn't fare much better. Seasonally adjusted GDP true we increased by 1.7%.But in as many as 10 EU countries the increase was higher. Meanwhile, a quarter earlier we were on the podium, overtaken only by Malta. And now Malta is in first place with an increase of 5.4%, next Croatia with 4.1 percent and Denmark with 3.9 percent. There are also countries (six to be exact) that have recorded a year-on-year decline in GDP. The strongest: Latvia – by 1 percent, Austria – by 0.8 percent. and Hungary – by 0.7 percent The largest European economy, Germany, is also in decline – for the second quarter in a row.
Let's go back to Poland. What was a strength in the euro zone turned out to be a weakness in Poland. Private consumption has slowed down dramatically, investments remain weak, and our foreign exchange balance has deteriorated. Our growth was fueled by an increase in inventories. Overall, economists emphasized the surprising structure economic growth in the third quarter. It seems that Poles are accumulating savings instead of spending money – this is probably related to rising inflation and fears of further increases, e.g. in bills. Investments are waiting for a larger injection from projects based on EU funds. What's next? Experts do not expect such an increase in household consumption as in the first half of the year, although the next quarter should be better.
Just a little clarification: Eurostat's comparison takes into account seasonally adjusted data (i.e. removing the effect of differences in the calendar, working days, etc.), both on a quarterly and annual basis. In Poland, in the case of an annual change, we discuss non-seasonally adjusted data. Hence the difference – the GDP reported in this way increased by 2.7% in the third quarter.
Depressing Germany, interesting Ireland, even more interesting Denmark
Finally, briefly about three European countries. The Community's largest economy is in poor condition, and these are not temporary problems. Germany have recorded annual GDP decline for five quarters in a row. According to forecasts by the government in Berlin, the entire year will also be slightly negative. And it will be the second such year in a row. Politics has been weighing heavily on the German economy lately – the collapse of the ruling coalition.
– The country has strong export ties with China, and Beijing also has its own problems that affect the German economy. In turn, the war in Ukraine and sanctions against Russia weaken Germany's competitiveness. And the third blow will be the actions of Donald Trump, who promised to raise tariffs on European products. This will hit Germany and China particularly hard. At the moment, the German economy seems to be in huge problems, and next year it may have even bigger problems – Piotr Kuczyński told us recently.
This week, the OECD cut its German GDP growth forecasts for next year, citing political uncertainty. Now he expects 0.7 percent. in positive territory, previously it was betting on 1.1 percent.
The situation is interesting Ireland. The EU tops when it comes to economic growth quarter to quarter – let us remind you, by as much as 3.5%. – it was stronger than expected. Year on year, the economy grew by 2.5%. The recovery in exports helped. However, this rebound from the third quarter will not allow the whole year to turn positive and Ireland will close the entire 2024 with a decline in GDP. Statistics Ireland reported that after the first nine months the country's economy is 1.7 percent. in the red compared to the same period of the previous year. This is related to the specific situation of Ireland. Due to low corporate taxes, many US companies pay taxes there and their profits are included in Irish GDP. Variability in statistics in this respect affects data on economic growth dynamics.
And still very interesting Denmark. Government this country has just once again raised its economic growth forecasts. This year, GDP is expected to grow by 3%. – 1.9% was expected in August. growth. The forecast for next year has gone up to 2.9%. with 2.2 percent The reason for this optimism is unique. Namely, it is largely about one industry, or even one company – that is pharmaceutical industry and Novo Nordisk. It is the manufacturer of a very popular slimming product, as well as a diabetes medication (which also helps to reduce weight), Ozempic. As he reminds me Reuters Agencyapproximately one fifth of the employment growth in Denmark is the result of the growing number of positions at Novo Nordisk. Forma employs approximately 30,000 people.
