The euro zone economy jumped out of recession in the third quarter, data showed today, but with slightly less spring than expected after the area's top three economies fell short of market forecasts.
Gross domestic product in the euro zone rose 0.4% quarter-on-quarter after five consecutive quarters of shrinking output, but was 4.1% lower year-on-year. Economists had on average forecast quarterly growth of 0.5% and a 3.9% annual decline.
Germany, France and Italy all reported a third-quarter increase in economic output, but the German 0.7% quarterly growth was below expectations of 0.8%, the French 0.3% increase only half of what was expected and the Italian 0.6% fell short of the 0.7% consensus.
More details on the German and French growth here
The growth ends the deepest economic downturn in Europe since World War Two, brought on by a global financial crisis, but economists say recovery is likely to remain fragile.
The European Commission forecast earlier this month that fourth-quarter growth would slow to 0.2% quarter-on-quarter in the last three months of 2009 and then to 0.1% in the first two quarters of 2010.
Growth is seen accelerating steadily from the third quarter of 2010 to reach 0.5% in the second quarter of 2011.
The European figures compare with a 0.9% improvement in third-quarter economic output in the US. Japan already exited from recession in the second quarter with 0.6% growth.
The challenge policymakers face now is deciding when to end the fiscal and monetary stimulus credited with averting a steeper slump and limiting the cumulative loss of GDP to five percentage points in the EU since GDP started falling in the second quarter of 2008.
That, the European Commission says, is three times as big as average output losses in three previous recessions since the 1970s.
While the largest economies of Europe are growing again, Britain, Ireland, Spain and others have yet to do so even if there is evidence that the worst of the crisis has passed.
Spain today reported a third-quarter GDP drop of 0.3%, versus a second quarter where the contraction was a far heftier 1.1%.
Beyond the euro currency area, Britain reported its sixth quarter of shrinkage in a row in the third-quarter, when GDP fell 0.4% versus the previous one. But Ireland's economy shrank at an annual rate of 7.4% in the second quarter.
On Europe's eastern flank, accustomed to far racier growth rates before the downturn, Czech GDP rose 0.8% in the third quarter and Hungarian GDP fell 1.8% in the same period, both compared to the second quarter.
