Euro zone GDP Q4 2024 | masr356.com

The euro zone economic system noticed zero development within the fourth quarter, flash figures from the European Union’s statistics agency Eurostat showed Thursday.

Economists polled by Reuters had anticipated development of 0.1% over the interval, following a larger-than-expected 0.4% growth within the third quarter.

The bloc-wide knowledge comes after worse-than-expected development prints from the euro zone’s two largest economies, Germany and France. Earlier on Thursday, official knowledge confirmed that Germany’s gross domestic product fell 0.2% in the fourth quarter, whereas France’s economic system also shrank slightly over the same period. Italy’s economic system flatlined quarter-on-quarter, data showed earlier Thursday.

In stark distinction, Spain’s gross home product grew by 0.8% within the fourth quarter, the nation’s statistics workplace INE stated Wednesday. Neighboring Portugal’s financial development additionally accelerated in the identical quarter, to 1.5% with its nationwide statistics company attributing the expansion to an “acceleration in private consumption.”

The euro was down 0.15% in opposition to the greenback following the info, which might spur on the European Central Financial institution relating to figuring out its subsequent rate of interest step afterward Thursday.

The central bank has sought to boost economic activity and investment in the euro zone by implementing 4 curiosity cuts final 12 months. The ECB is predicted to make another 25-basis-point trim when it meets later on Thursday to deliver the important thing fee, the deposit facility, right down to 2.75%.

Observe CNBC’s ECB dwell weblog right here: European Central Bank set to trim interest rates for fifth time since June

Economists count on the central financial institution to make additional rate of interest cuts this 12 months as fears over faltering development trump issues over cussed inflation within the bloc.

“The stagnation in euro-zone GDP in Q4 helps our view that the area’s financial prospects are worse than most assume. We count on this to immediate the ECB to chop rates of interest by extra this 12 months than is discounted out there,” Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics, stated in emailed feedback following the info launch.

In December, the central bank forecast that the euro zone economic system would grow by 1.1% in 2025, saying that it expects euro space GDP development to “weaken considerably within the brief time period, amid vital uncertainty.”

“Survey-based indicators related for exercise, such because the Buying Managers’ Index (PMI) and enterprise and shopper confidence indicators from the European Fee, stay subdued,” the central financial institution acknowledged in December.

The ECB had anticipated the economic system to develop by 0.2% within the fourth quarter of 2024 because the one-off components supporting development final summer season, such because the Paris Olympics, pale, and amid persevering with “subdued confidence, excessive uncertainty and geopolitical tensions.” The central financial institution anticipates GDP development to be 0.3% within the first quarter of 2025.

Central financial institution policymakers will likely be conscious of inflationary pressures within the area, with the euro zone shopper worth index ticking upward in current months, hitting 2.4% in December.

Core inflation, which strips out unstable meals and power costs, was unchanged at 2.7% for the fourth consecutive month in a row. The central financial institution forecast the inflation fee within the bloc to come back in at 2.1% this 12 months.