EU - GDP Growth Picked Up In 3rd Quarter

Wednesday, November 16, 2005

In the 3rd quarter of 2005 GDP growth in the EU picked up to an annual rate of 1.5% (Q2: 1.1%) in the Eurozone and accelerated to an average of 1.6 % (1.3%) in the EU25 area. According to Eurostat data from Tuesday tiny Lithuania saw its GDP advancing at an annual rate of 8.2% (7.2%) whereas Greece was the powerhouse in the Eurozone with a stable growth rate of 3.7%.
I have not yet figured out how Eurostat arrived at the EU figures since data from 14 countries is missing, most important of them France.
In Germany growth doubled to 1.4% in comparison with Q2. Austria and the UK come in at the average rate of 1.6%. While this is a marginal improvement for the UK, Austria fell back by 0.2 percentage points. The accelerating closure of shops in Austria cannot be overlooked and inspires the idea to do some travelling within Europe. But who wants to travel in the cold wet season?
Of note is also that Eurostat gives a GDP growth rate of 3.6% (3.6%) for the US in Q3. This is in conflict with official US data which arrived at 3.8% (3.3%) growth but may be attributed to different annotation methods in the old and the new world.
ECB president Jean-Claude Trichet gave a speech on the coming legal framework for insurance and pension funds that contained no actual commentary on the economic, inflation or interest rate outlook. Wire reports cited him saying that he had already said everything that needs to be said.
Pension funds have increasingly turned to hedge funds to enhance their performance. As these funds were introduced in Europe only in the last decade they are suffering from the markedly lower yield levels which has earned them a lot of criticism from their clients. Pension funds were sold with the argument that retirees would need extra income in the face of reductions in state pensions. In Germany state pensions have been largely unchanged in thelast years and the budget plans of the new coalition see zero rounds in the next three years as well.
Inflation Day
Today new inflation data from the EU, the UK and the USA is due. On October 28 Eurostat has given a flash estimate for October that sees consumer prices 2.5% (2.6%) higher than a year ago. The data scheduled for release at 9 AM GMT has not yet been made public at Eurostat's website.
Due to schedule conflicts I will not be able to report on inflation data today.
US Used Chemical Weapons In Iraq
Elsewhere in the world the misdoings of the USA, this time the use of white phosphorus against Iraqi guerrilla in fights in Falluja tops the headlines. See this BBC story for more information. The US has not signed an international treaty that bans the use of this chemical weapon. An Italian journalist who was shot at by US troops on her way to Baghdad airport - an incident US officials called "unintended" - had made public this scandal on Italian TV on November 8 that led to lenghty demonstrations in front of the US embassy in Rome. US officials are exempted from accountability for their atrocities in front of the international war tribunal in The Hague. How convenient to be a little bit more equal.

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