Eurozone Q3 GDP Forecasts: Last Update

Several indicators which can be used to update our forecasts concerning Q3 GDP were published this week:


1/ France’s merchandise trade deficit widened in September as imports grew at nearly twice the rate of exports, the Customs Bureau said Friday. Note that trade deficit was revised higher in August and July.


2/ France’s industrial production decreased for the third successive month in September. In the third quarter, manufacturing production dropped 1.1 percent quarter-on-quarter.

3/ Germany’s trade surplus widened in September to a record high in a development that underlines criticism that Europe’s largest economy is not importing enough to boost other economies in Europe.


4/ Germany’s federal statistical office said industrial production declined by a seasonally adjusted 0.9% in September.


5/ Italy Stats Agency confirmed that Itilian GDP contracted in Q3.


As a consequence, we can build our scenarios with a more cautious approach regarding French and Italian contributions. By taking into account the weight of each economy in the euro area (Germany: 27%; France: 21%; Italy: 18%; Spain: 12% and Belgium: 5%), we get the following forecasts:


Growth Forecasts
Scenario Pessimistic Central Optimistic
Germany 0.2% 0.3% 0.4%
France -0.1% 0.0% 0.1%
Italy -0.2% -0.1% 0.0%
Spain (1st publication) 0.1% 0.1% 0.1%
Belgium (1st publication) 0.3% 0.3% 0.3%
Others 0.0% 0.1% 0.2%


Growth Contributions
Scenario Pessimistic Central Optimistic
Germany 0.054% 0.081% 0.105%
France -0.021% 0.000% 0.021%
Italy -0.054% -0.036% -0.018%
Spain (1st publication) 0.012% 0.012% 0.012%
Belgium (1st publication) 0.015% 0.015% 0.015%
Others 0.000% 0.017% 0.034%
Total 0.006% 0.089% 0.169%
Total (rounded) 0.0% 0.1% 0.2%


In the central scenario, growth expectation was revised downward to 0.1% QoQ. It seems that situation will normalize in Q3 with weaker growth both in France and Germany, a smaller contraction in Italy and a rebound in Spain.