The eurozone economy grew faster than expected in the three months to September and is likely to keep up its rapid pace with economic confidence at a nearly six-year high, official EU data showed Thursday.

The combined economy of the 12 countries sharing the euro expanded by 0.5 percent in the third quarter while growth over 12 months was slightly stronger than expected at 2.7 percent, the European Union's Eurostat data agency said.

The 12-month rate was better than both an earlier estimate from Eurostat and private economists' expectations for growth of 2.6 percent.

This buoyant picture followed strong growth forecasts for the eurozone from the Organisation for Economic Cooperation and Development and the International Monetary Fund on Tuesday.

The Eurostat data showed that although growth was stronger than expected in the third quarter, the eurozone economy lost pace after particularly brisk expansion in the second quarter.

The single European currency club's economy grew 1.0 percent in the second quarter over the previous three months and 2.8 percent over one year, Eurostat said, revising the 12-month rate slightly higher from 2.7 percent.

Meanwhile, the economy of the 25-nation European Union grew 0.6 percent in the three months to September and 2.9 percent over one year. That was slightly slower than in the second quarter when the EU economy expanded 1.0 percent over one quarter and 3.0 percent over one year.

"Despite the significant slowdown in eurozone GDP (gross domestic product) growth in the third quarter, the overall picture remains healthy," said economist Howard Archer with consultancy Global Insight.

"The third quarter moderation in growth was clearly substantially a correction from the particularly robust expansion seen in the first half of the year and was dragged down by the stagnation in the French economy," he added.

While quarterly growth in the other eurozone countries only slowed, it ground to a halt in France, weighing on the overall performance of the bloc.

Although growth cooled slightly in the third quarter, Europe is in the midst of its strongest expansion since the dot.com boom at the beginning of the century, fuelled by solid business investment and firm consumer spending.

The European Commission said on Thursday that it was expecting firm quarterly growth in the months ahead, lifting its fourth quarter growth projection to 0.3-0.7 percent from a forecast in October of 0.2-0.7 percent.

It was also more optimistic about the first three months of next year, projecting quarterly growth of 0.3-0.8 percent compared with a previous forecast of 0.0-0.5 percent.

The European Union's executive arm foresaw a similar pace in the second quarter of 2007, predicting 0.3-0.9 percent quarterly growth in a first estimate.

Also boding well for the eurozone's outlook, a European Commission survey found that economic optimism kept soaring in November at the highest level since the beginning of 2001, driven by firm confidence across nearly all sectors.

The European Commission's eurozone economic sentiment indicator remained high at 110.3 points in November, dipping slightly from 110.4 points in October, but beating private economists' forecasts for 110.0 points.

Separately, the commission's eurozone business climate indicator rose in November to its highest level ever after levelling off in October.

"This suggests that industrial production growth will remain strong in the fourth quarter of 2006," it said.

The commission's survey of industry managers' outlooks rose to 1.54 points from 1.41 points.

On Tuesday, the OECD and IMF had raised their prospects for eurozone growth this year and next.

The OECD said that the 12-nation eurozone economy was set to grow by 2.6 percent in 2006 and 2.2 percent in 2007.

The International Monetary Fund put eurozone growth this year at 2.5 percent and at 2.0-2.5 percent next year.