Eurozone Q3 GDP Beats Forecasts at 0.4% Despite France and Germany Weakness

The eurozone economy expanded 0.4% quarter-on-quarter in the third quarter of 2026, exceeding analyst expectations of 0.2%, while annual growth reached 1.3% versus a consensus of 1.1%. The surprise beat masks underlying weakness in key economies: France contracted unexpectedly and Germany posted only modest gains.

ECB policymakers including Panetta and Nagel have signaled rising inflation risks could require further policy action despite the slowdown. The divergence between headline growth and underlying price pressures presents a complex policy backdrop for the central bank heading into year-end.

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