If there was any doubt that Europe will get another dose of central bank stimulus soon, it was removed Friday with data confirming that growth is slowing again.
Third quarter GDP across the 19 countries that use the euro grew by just 0.3% over the previous three months. That was weaker than expected and represents a slowdown since the second quarter, when the economy grew by 0.4%.
European Central Bank President Mario Draghi and fellow officials had already been talking up the chances of an interest rate cut, expanded money printing, or both, when they meet for the last time this year on December 3.
Friday’s growth figure, non-existent inflation, and unemployment rates stuck near 11%, make more monetary policy easing in December look like a done deal, barring a miraculous turnaround.
“The modest deceleration in growth reinforces the case for the ECB to deliver further stimulus at its December policy meeting,” noted BNP Paribas market economist Dominic Bryant.
