Eurozone growth of 0.3% buoyed by Germany

16 Feb 15
Growth in the eurozone was better than expected in the final quarter of 2014, helped by a strong pick-up in Germany, according to flash estimates published by Eurostat.

By Judith Ugwumadu | 16 February 2015

Growth in the eurozone was better than expected in the final quarter of 2014, helped by a strong pick-up in Germany, according to flash estimates published by Eurostat. 

The statistical office of the European Union showed that the eurozone economy expanded by 0.3% between October to December compared to the previous quarter last year.

Economists had expected a fourth quarter growth of 0.2%, according to a poll of analysts conducted by Bloomberg. 

This growth was anchored by the German economy, which increased ‘surprisingly’ by 0.7% over the last three months of the year, due to a rise in business investment, Azad Zangana, senior economist at Schroders, commented.

Official figures, however, showed that growth in the country had been depressed in previous quarters due to tensions between Europe and Russia. 

For 2014 as a whole, the eurozone achieved 0.9% growth, the fastest rate since 2011 and the European sovereign debt crisis, Zangana said, predicting that GDP would accelerate further in the first half of this year.

‘However, there are risks worth considering. Growth could disappoint if households and companies react negatively to the latest Greek crisis, and the continued tensions between Russian and Europe.’

Greece ended 2014 with an economic contraction of -0.2%, despite reporting growth at the start of 2014.

But Spain was another of the eurozone’s stronger performers, with growth of 0.7%, which the country predicted last quarter, as it approved a programme of austerity to continue cutting departmental budgets by almost 5%.

Meanwhile, France reported a 0.1% growth rate, a slowdown compared to the 0.3% growth posted in the previous quarter. The French statistics office reported a slight increase in consumer spending, but a continued contraction in investment. Growth in Italy was stagnant in the fourth quarter of 2014.

Outside of the big four eurozone countries, both Portugal and the Netherlands recorded another strong quarter, each seeing GDP rise by 0.5%. 

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