Eurozone Economy Expected to Contract or Stagnate in Q4, Says ECB’s De Guindos

MADRID – The economy of the euro zone is expected to experience a slight contraction or, at best, stagnation in the fourth quarter, according to ECB Vice President Luis de Guindos.

De Guindos noted that the quarterly growth rate for the third quarter was recorded at -0.1%. He emphasized that this figure should not be overly interpreted, suggesting that both a slight increase of +0.1% or a decrease of -0.1% indicate a stagnant economic condition, which is likely to persist into the fourth quarter.

Recent data revealed that euro zone economic growth fell short of expectations in the third quarter, with a flash estimate showing a 0.1% decline in gross domestic product compared to the previous quarter and a marked slowdown in year-on-year growth rates.

Additionally, preliminary figures from the Composite Purchasing Managers’ Index (PMI) for October indicated that the euro zone entered the final quarter of 2023 in a weakened position, with the index reaching its lowest point since late 2020.

During its meeting on October 26, the ECB opted to maintain interest rates, marking the end of an unprecedented series of 10 consecutive rate increases. De Guindos stated that due to the prevailing high levels of uncertainty, the ECB intends to adopt a data-driven approach regarding its future monetary policies.