08:15 AM EDT, 10/30/2026 (MT Newswires) -- The eurozone economy recorded a higher-than-expected growth in the third quarter, despite a steady increase in energy prices as the war in the Middle East drags on. The euro area's gross domestic product grew 0.4% in the third quarter, following a 0.6% gain in the prior three-month period, according to Eurostat's flash data published Friday. The preliminary reading came in above market forecasts of a 0.2% growth. Among the member states, Germany and Spain saw a GDP expansion of 0.2% and 0.6%, respectively, easing from 0.3% and 0.7% in the previous quarter. In contrast, France's economy shrank 0.1% after seeing zero growth previously, while Italy's GDP was flat, compared with a 0.2% gain earlier. Ireland, meanwhile, booked the strongest quarterly increase with a 5.5% GDP growth, against the 10.2% increase in the previous three-month period. "The eurozone economy seems to have shrugged off the Middle East crisis. In fact, growth has accelerated markedly since the war began at the end of February, a seemingly counterintuitive development for a major energy importer. Then again, the impact on inflation has been mild so far and real wage growth is still positive. Industry is increasingly feeling the effects of higher energy costs, but is also benefiting from the tech boom and increased defence and infrastructure spending," ING said in a quick take note. "Without Ireland, the eurozone growth rate came in at a decent 0.2% but has now dropped for three consecutive quarters." On an annual basis, the eurozone economy expanded by 1.3% during the third quarter, compared with the 1.2% growth in the previous quarter and the consensus estimate of a 1.1% gain. "With energy prices still rising steadily, including gas prices, the winter months will see an additional growth challenge. On top of that, interest rates are now higher and businesses indicate less appetite for borrowing as a consequence, according to the ECB bank lending survey," ING added.

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