Eurozone Q4 GDP Growth Slows Slightly

Eurozone Q4 GDP Growth Slows Slightly

The data from Eurostat showed that Europe's largest economies performed well in the final quarter of 2017. The euro-area economy maintained its robust growth pace at the end of a year ago, setting the stage for another solid performance in 2018 that may sway European Central Bank policy makers into winding down unprecedented stimulus.

The figure follows up growth of 0.9 percent in the first quarter of 2017, 0.6 percent in the second, and 0.7 percent in the third - all adjusted for price, seasonal and calendar effects.

In a separate release, Eurostat said industrial production grew for the third consecutive month in December.

Nevertheless, the figures published were "indicative of a very good start into the year 2018", Zeuner told the press.

On a yearly basis, GDP growth eased slightly to 2.7 percent from 2.8 percent in the preceding period.

The EU economy grew at its fastest rate in 10 years in 2017, registering a 2.5% increase on the year before.

The German economy expanded further in the fourth quarter of 2017 according to the latest data from the country's official statistics office on Wednesday.

The Federal Statistical Office highlighted the significant role of rising exports and government expenditure in contributing to Q4 GDP growth, while private consumption remained largely stagnant. It reported a 0.6 percent increase in GDP on January 30.

"In terms of domestic factors, rising wages, low inflation and record-level employment are driving consumer spending; meanwhile, investment is rising, helped by strong corporate profitability and buoyant confidence". Economists polled by Reuters had expected a 0.2 per cent monthly and 4.2 per cent annual rise.

Eurostat also revised upwards November production figures to 1.3 percent month-on-month from 1.0 percent and to 3.7 percent year-on-year from 3.2 percent. However, observers have since also pointed to political risks which could still derail production.

Germany's robust economic upswing extended into the fourth quarter, buttressing growth in the euro area as policy makers prepare to wind down stimulus.

"The new government should seize the opportunity to improve the competitiveness of Germany if it doesn't want the current investment boom to fade", Wansleben argued. European Central Bank policy makers say they're increasingly confident that robust economic growth will slowly rekindle price pressures, paving the way for a gradual withdrawal of monetary accommodation.

"The expansive monetary policy of central banks since the collapse of the US investment bank Lehman Brothers has pumped enormous amounts of liquidity into markets, leading to a steep rise in the value of equities".

Additionally, Petersen cautioned that the "protectionist tendency of the US government endangers global growth".

An engine of growth for the currency bloc's economy in recent years, Germany is benefiting from rising demand for industrial goods from within the country and overseas, as well as healthy consumption underpinned by steadily declining unemployment.

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