The eurozone economy grew more than expected at the end of last year, with fourth-quarter GDP rising 0.3 percent from the previous three months — maintaining the pace it set in the previous period — Eurostat said yesterday.
Analysts in a Bloomberg survey had foreseen an increase of 0.2 percent.
Germany, Italy and Spain all surpassed estimates, with the latter proving the standout performer once again through expansion of 0.8 percent.
Photo: AP
Meanwhile France matched forecasts at 0.2 percent.
The currency bloc is holding up well after the US raised tariffs last year and should see growth of more than 1 percent this year as a spending splurge hauls Germany out of its long malaise.
The region can breathe easier over inflation, which is settling at about the European Central Bank’s (ECB) target, keeping interest rates steady at 2 percent.
Spain said that consumer prices this month rose 2.5 percent from a year earlier — down from 3 percent the previous month.
Regional data from Germany suggested that its national figure might slightly exceed the 2 percent estimate, according to Bloomberg Economics.
An ECB poll of eurozone consumers showed that inflation expectations over the next 12 months held steady at the end of last year.
The survey indicated a slightly more positive mood regarding the economy.
Indeed, other parts of the bloc also recorded growth: GDP was up by 0.5 percent in the Netherlands, 0.2 percent in Austria, 0.8 percent in Portugal and 1.7 percent in Lithuania.
An early indicator pointed to expansion of 0.6 percent in Finland, but Ireland slipped into a recession.
In Germany, household and government consumption drove growth of 0.3 percent from October to December last year.
German Chancellor Friedrich Merz’s outlays on infrastructure and defense should add to momentum as this year progresses — particularly if he can also deliver on promises to slash bureaucracy and boost competitiveness.
The German government predicted that GDP would rise 1 percent this year — progress after it only narrowly avoided a triple-dip recession last year.
Spain’s economy has outperformed its peers for several years, helped by a booming tourism industry and immigration.
Its latest growth success was fueled by household consumption, its statistics office said.
While Italy saw trade act as a drag on its economy, that was more than offset by domestic demand, resulting in expansion of 0.3 percent.
For France, the second half of last year was clouded by another government collapse, as well as rows over tax hikes and spending cuts that are needed to rein in a gaping budget deficit.
However, fourth-quarter investment rose by 0.2 percent, while consumer spending growth accelerated to 0.3 percent.
For last year, GDP rose 0.9 percent.
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