08:47 AM EDT, 10/30/2024 (MT Newswires) -- Helped by strong consumer spending in Spain, an Olympic boost in France and a rise in private and public consumption in Germany, the eurozone's gross domestic product growth accelerated to 0.4% quarter over quarter in Q3, well above the Bloomberg consensus for a more muted gain of 0.2%, noted Berenberg.

After a long period in which consumers raised their savings rate rather than opening their purses in line with the gains in their real incomes, private consumption may be starting to support demand more meaningfully over time, said the bank.

The further gradual uptick in consumer confidence to -12.9 in September to -12.5 in October, the least-bad level since Russia started its full-scale invasion of Ukraine in February 2022, points this way, stated Berenberg.

Unfortunately, the good news for growth may not last, pointed out the bank. For Germany, the positive surprise for Q3 GDP was mostly offset by a downward revision to GDP in the previous quarter -- now a 0.3% quarter-over-quarter contraction instead of just a 0.1% decline.

The French Olympic bounce is over and Spain may struggle to maintain its torrid pace of growth of 0.8% quarter over quarter in both Q2 and Q3. Despite a less negative outlook for domestic consumption, business confidence dropped further in October, driven mostly by a decline in industrial confidence to its lowest level since July 2020.

After the Q3 bounce, eurozone growth looks set to fall back to a quarterly rate of no more than 0.2% quarter over quarter in Q4, added Berenberg. Coupled with resilient services inflation judging by Wednesday's German data, the positive surprise on Q3 GDP should tilt the balance of opinion at the European Central Bank against a 50bps rate cut on Dec. 12.