Eurozone GDP grows 0.4% despite energy crunch

The eurozone economy expanded by 0.4 percent in the third quarter, EU statistics agency data showed Friday, slowing from 0.6 percent in the previous quarter but beating the 0.2 percent forecast by economists surveyed by Bloomberg.

The figures pointed to growth despite higher energy costs and the effects of the Middle East war. Economists warned the picture was uneven and said Ireland's 5.5 percent growth lifted the overall eurozone number; excluding Ireland, they estimated growth at 0.2 percent.

ING chief economist Bert Colijn said the eurozone economy appeared to have weathered the Middle East crisis so far, helped by defence and infrastructure spending and a technology boom. Oxford Economics senior economist Paolo Grignani said the data showed “stagflationary tendencies,” with growth holding up while national inflation figures surprised to the upside.

Eurozone inflation reached 3.8 percent in September, described as a three-year high. France's GDP contracted 0.1 percent in the third quarter, while Germany grew 0.2 percent, Italy recorded no growth and Spain grew 0.6 percent.