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Eurozone economy maintained its robust growth momentum in the third quarter, suggesting that it is set to end the year on a strong note, and extend support to the European Central Bank's decision to reduce the size of its asset purchases at the start of next year even as inflation is away from its target.
Gross domestic product grew 0.6 percent from the previous three months, when the single-currency economy expanded 0.7 percent, preliminary data from Eurostat showed Tuesday. Year-on-year growth in the euro area accelerated to 2.5 percent from 2.3 percent.
The figures were in line with the initial estimates released on October 30.
The annual growth rate of the 19-nation economy outpaced the United States' 2.3 percent expansion in the third quarter. The pace also exceeded the UK's 1.5 percent growth during the same period.
Among the big four economies of the euro area, Germany and Italy released their third quarter growth data on Tuesday. The pace of expansion improved in both economies.
The biggest Eurozone economy grew 0.8 percent sequentially in the third quarter, after a 0.6 percent expansion in the previous three months, Destatis announced. Economists had expected the rate to remain unchanged.
The year-on-year growth rate climbed to 2.8 percent from 2.3 percent growth seen a quarter ago.
Positive contributions to sequential growth came from foreign trade and investment. In the third quarter, the increase in exports was higher than that of imports.
Survey data from the think tank ZEW showed on Tuesday that German investor confidence hit a six-month high in November. The ZEW Indicator of Economic Sentiment for Germany rose to 18.7 from 17.6 in October. Nonetheless, the score was below the expected level of 19.5.
Overall high levels of growth across Europe in the third quarter are supporting further growth in Germany and boosting expectations for the coming six months, ZEW President Achim Wambach said.
"This favorable economic climate should be used to create a stronger and more robust basis for future growth," Wambach added.
Italy's quarterly growth rate accelerated to 0.5 percent from 0.3 percent, and exceeded economists' forecast for 0.4 percent growth. There was a positive contribution both to the national component and to foreign exports, the statistical office Istat said.
On a yearly basis, economic growth improved to 1.8 percent from 1.5 percent in the previous quarter. Economists had forecast 1.7 percent expansion.
Late October, the ECB said the size of its monthly asset purchases will be halved to EUR 30 billion at the start of next year, but they will continue for nine months.
The bank opted the "lower for longer" style of tapering for a second time this year and many hope this would be the beginning of the end of ultra-easy monetary policy since the 2007-08 global financial crisis.
That said, the bank has stressed that the economic recovery is still dependent on the monetary stimulus as inflation is yet to return to its target of "below, but close to 2 percent".
Last week, the European Commission forecast that Eurozone is set for its fastest growth in a decade this year, thanks to the resilient private consumption, stronger global growth and falling unemployment.
The executive arm of the European Union raised the euro area growth forecast for this year to 2.2 percent from 1.7 percent. The slowing pace of job creation and household purchasing power growth implies a slight moderation in momentum over the next two years, the EU said.
Separate data from Eurostat on Tuesday showed that industrial production dropped for the first time in three months in September.
Industrial production fell 0.6 percent month-on-month, reversing a 1.4 percent rise in August, in line with economists' expectations. On a year-on-year basis, production growth slowed to 3.3 percent from 3.9 percent.
"The flash estimate of euro-zone Q3 GDP confirmed that the economy is in very good health," Capital Economics economist Jennifer McKeown said.
"Admittedly, industrial production fell in September and the renewed rise in the euro exchange rate is a downside risk to exports."
Capital Economics still believes the message from the surveys is that the upturn will continue apace, the economist added.