Eurozone Growth Revised Lower

Eurozone economic growth in the final three months of last year was not as good as initially thought. The statisticians at Eurostat previously estimated GDP expanded by 0.5% quarter-on-quarter, but on Tuesday they revised that down to 0.4%. That initial flash estimate was on 31 January.

On a year-on-year basis, growth for the 19 countries using the euro slowed to 1.7% from the 1.8% recorded in the third quarter. The numbers are particularly important in the region’s three countries with upcoming elections, Euronews reported.

Compared with the same period a year earlier the Netherlands enjoyed 2.5% growth (0.5% quarter-on-quarter), France was 1.1% (0.4% quarter-on-quarter) and Germany 1.8% (0.4% quarter-on-quarter).

Germany, the bloc’s largest economy, mirrored the eurozone as a whole with 0.4% expansion, lower than expected but a rebound from a near-stall (0.1%) in the previous quarter. 

Italy also disappointed, trailing other major European economies with just 0.2% growth and rising unemployment rates. The Netherlands expanded by 0.5%, a slower pace than before. The bright spot among the large economies was Spain with 0.7% growth.

At the other end of the growth scale, the Greek economy contracted by 0.4%, while Finland shrank 0.5%, as years of austerity and the sanctions imposed on neighboring Russia took their toll.

The eurozone GDP growth revision was partly due to a large drop in industrial output in December. There was a reduced contribution from exports even as protectionist calls increased.

By contrast domestic demand was stronger in the three top economies–Germany, France and Italy–but consumer spending is at risk from rising prices with inflation at 1.8% in January.