Eurozone GDP Growth Slows On Consumption, Exports

The euro area economy expanded at a slower pace as initially estimated at the end of 2019 driven by weaker consumption and exports, a revised estimate published by Eurostat revealed on Tuesday.

Gross domestic product in the 19-nation bloc grew only 0.1 percent sequentially in the fourth quarter, following third quarter’s 0.3 percent expansion. The rate matched the estimate published on February 14.

On a yearly basis, economic growth eased to 1 percent from 1.3 percent in the third quarter. The fourth quarter growth was revised up from 0.9 percent.

The expenditure-side breakdown of GDP showed that sequential growth was largely underpinned by gross fixed capital formation in the fourth quarter.

Household spending growth slowed to 0.1 percent from 0.5 percent. Likewise, growth in government spending halved to 0.3 percent from 0.6 percent.

Meanwhile, gross fixed capital formation advanced 4.2 percent, in contrast to a 3.8 percent drop a quarter ago.

Exports gained 0.4 percent, following a 0.6 percent rise in the third quarter. On the other hand, imports grew 2.2 percent, reversing a 1.3 percent drop in the preceding quarter.

Among big-four economies, only Spain logged a faster growth of 0.5 percent in the fourth quarter. Germany’s economy stagnated, while France and Italy contracted 0.1 percent and 0.3 percent, respectively.

The Organisation for Economic Co-operation and Development, last week, downgraded its global growth outlook saying the impact of the Covid-19 outbreak on economic prospects is set to be severe.

According to OECD, growth in the 19-nation bloc will ease to 0.8 percent this year, before bouncing back to 1.2 percent in 2021.

Eurostat data also showed that employment grew 0.3 percent sequentially, slightly faster than the 0.2 percent rise in the third quarter. On a yearly basis, employment advanced 1.1 percent.

In the whole year of 2019, employment growth eased to 1.2 percent from 1.5 percent in 2018.

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