The German economy accelerated at the end of last year while France’s slowed down, signaling that the eurozone recovery remained uneven as the European Central Bank (ECB) prepared to pledge unlimited quantitative easing.
German GDP surged 0.7 percent in the fourth quarter of last year after expanding 0.1 percent in the previous three months, the Federal Statistics Office in Wiesbaden said yesterday. The French economy grew 0.1 percent in the fourth quarter and 0.3 percent in the July-to-September period. Analysts surveyed by Bloomberg News predicted fourth-quarter growth of 0.3 percent and 0.1 percent, respectively.
Seven years after the onset of the global economic crisis, the 19-nation eurozone is still plagued by falling prices and high unemployment, while a showdown between Greece and its European partners over the nation’s debt has rekindled the risk of a euro break up. More stimulus is in the pipeline from a slump in oil prices and a quantitative-easing plan by the ECB that has already weakened the euro.
“It’s not a story of ‘here comes the boom,’” ABN Amro Bank NV researcher Nick Kounis said. “But we are starting to see signs of a more convincing recovery.”
Eurozone GDP probably expanded 0.2 percent last quarter after growing at the same rate in the third, according to a separate survey. That report was due from the EU’s statistics office in Luxembourg at 11am yesterday.
Spain, the eurozone’s fourth-largest economy, reported on Jan. 30 that its economy expanded at the fastest pace in seven years in the fourth quarter, with GDP rising 0.7 percent from the third quarter.
“The German economy turned out to be strong in a difficult global economic environment, benefiting especially from a strong domestic demand,” Federal Statistical Office president Roderich Egeler said on Jan. 15.
At the time, the office said GDP increased 0.25 percent in the fourth quarter and 1.5 percent for the whole of last year.
Yesterday it said growth was driven by domestic demand, with exports and imports rising strongly. Private consumption rose markedly in the fourth quarter, and investment developed positively, driven by a significant increase in construction output. A full data breakdown is to be published on Feb. 24.
The Bundesbank last month said that the German economy has overcome the “weak phase” it hit early last year, with consumers benefiting from falling oil prices and rising salaries. Real wages rose 1.6 percent last year, the most since data collection started in 2008.
At the same time, solid global demand from the US to China spurred the performance of the country’s export-oriented businesses.
Daimler AG, which vies with fellow German companies BMW AG and Volkswagen AG’s Audi unit to be the world’s largest luxury automaker, reported a 10 percent increase in fourth-quarter profit. HeidelbergCement AG, the world’s third-biggest cement maker, also reported higher profit that was buoyed by residential construction in North America.
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