The eurozone economy grew slightly faster than anticipated in the third quarter of the year, official data showed Thursday, buoyed by better-than-anticipated growth in France despite political turmoil in Europe's second-biggest economy.
The EU's data agency said the 20-country single currency area recorded growth of 0.2% over the July-September period from the previous quarter.
The figure was higher than the 0.1% forecast by analysts for Bloomberg and FactSet, but economists sounded a note of caution for the future.
"The mood about the economy seems decently optimistic at the moment, despite ample downside risks clearly weighing on the outlook," ING economist Bert Colijn said. "We do expect a gradual acceleration of growth over the coming year but remain cautious about marking this as the start of a growth spurt."
Spain remained the best performer among the bloc's largest economies, growing 0.6% in the quarter, in line with forecasts, while France expanded by 0.5%, beating expectations for 0.2%. Germany and Italy both stagnated.
Thursday's data also showed the eurozone economy grew by only 0.1% in the second quarter of this year.
The data arrived as the European Central Bank (ECB) is expected to keep its key deposit rate steady later on Thursday.
The 27-country European Union economy expanded by 0.3%, after recording 0.2% growth between April and June, the data also showed.
The eurozone economy was supported by surprising data from France.
Despite political instability linked to the country's massive debt and deficit, the French economy grew by 0.5% in the third quarter.
The surprise was thanks to a jump in investments and exports, "in part because of a strong aerospace sector, which tends to see volatile production," Colijn said.
Spain's economy also grew by 0.6% between July and September, but it slowed down from a whopping 0.8% in the previous quarter.
But Germany, Europe's biggest economy, flatlined in the same period, although it narrowly dodged a recession.
Germany, which has broadly stagnated for the past three years as its industry lost competitiveness, remains the bloc's problem child, but a massive increase in government spending is likely to prop up growth.
It may, however, take a few more months or even quarters before that spending starts to make its way into the economy, raising the risk of further growth weakness in the near term.
"Leading indicators like the Ifo business climate survey and PMI indices are pointing to a beginning economic recovery in the fourth quarter, but its momentum will remain weak initially given ongoing geopolitical and trade-related uncertainty and negative media perceptions of the initial work of the new German government," Timo Klein at S&P Global Market Intelligence said.
While trade tensions, lingering uncertainty and Chinese dumping of surplus goods could still weigh on growth in the months ahead, economists remain relatively upbeat about the outlook, and ECB projections suggest the third quarter may have been the worst for some time.
Growth could pick up as past interest rate cuts work their way through the economy, households sit on ample savings, Germany boosts spending and uncertainty over tariffs eases.
