BRUSSELS, Dec 20: Eurozone growth is gaining momentum as business investment booms, although private consumption remains hesitant, the European Commission(EU) said Tuesday.
The eurozone economy grew 0.6 per cent in the third quarter of this year after growth of 0.4 per cent in the second quarter, the EU’s executive arm predicted in its quarterly report on the bloc, without offering a forecast for the fourth quarter.
In the third quarter, the commission saw the eurozone economy expanding on an annual basis at a rate above the bloc’s estimated potential growth rate of about two per cent.
Looking ahead, the commission stuck to previous estimates for growth this year of 1.3 per cent and 1.9 per cent next year. “The gross domestic product (GDP) growth in the euro area accelerated to rates above potential in the third quarter of 2005, and leading indicators suggest that economic activity remained sustained during the last months of 2005,” the commission said.
“Although private consumption is improving only gradually, domestic demand is finally showing signs of a significant strengthening on the back of a recovery in investment, which recorded its strongest increase in the last five years,” it added.—AFP
