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Published: Wed, February 15, 2017
Global Media | By Abel Hampton

Euro zone growth hits 0.4% in fourth quarter of 2016


Men work at the assembly line in the truck production plant of truck and bus-maker MAN AG in Munich, Germany July 30, 2015.

The quarterly growth figure was lower than an initial estimate of 0.5% released on January 31.

"The data are all right - German growth is solid, and impulses came exactly from where we expected them to", Marco Wagner, an economist at Commerzbank AG in Frankfurt, told Bloomberg. The year/year figure, 1.2%, was lower than both the 1.7% consensus forecast and the 1.5% number for the previous quarter.

"Therefore growth could slightly pick up in the first quarter of 2017", Kraemer said, adding that private consumption would continue to support overall growth due to record-high employment, strong pay hikes and ultra-low interest rates.

On the year, GDP grew by 1.7%, down from the 1.8% increase estimated last month and from the 1.8% rise in the third quarter. There was also a quarterly contraction for Greece and Finland which will maintain concerns surrounding underlying structural vulnerability within the Euro-zone.

The change is partly down to a dismal performance of industrial output, which had its biggest fall in more than four years in December.

Eurozone economic growth in the final three months of a year ago was not as good as initially thought.

German investor confidence fell sharply in February, the ZEW institute's closely-watched survey showed Tuesday, reflecting fears for Europe's largest economy at a time of global political uncertainty.

Consumer prices, harmonized to compare with other European countries, rose by 1.9 percent on the year in January, separate data released on Tuesday showed.

Against this background, EURUSD might have been expected to weaken, given that it makes a tapering soon of the economic stimulus now provided by the European Central Bank less likely.

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