Euro zone GDP Q4 2024

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Euro zone GDP Q4 2024

An employee places an item in the window display at a delicatessen in the Piazza Campo di Fiori in Rome, Italy, on Tuesday, Dec. 6, 2016.

Bloomberg | Bloomberg | Getty Images

The euro zone economy saw zero growth in the fourth quarter,

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Economists polled by Reuters had expected growth of 0.1% over the *******, following a larger-than-expected 0.4% expansion in the third quarter.

The bloc-wide data comes after worse-than-expected growth prints from the euro zone’s two largest economies, Germany and France. Earlier on Thursday, official data showed that Germany’s gross domestic product fell 0.2% in the fourth quarter, while France’s economy also shrank slightly over the same *******. Italy’s economy also flatlined quarter-on-quarter,

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Thursday.

In stark contrast, Spain’s gross domestic product grew by 0.8% in the fourth quarter, the country’s statistics office 

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 said Wednesday.

The European Central Bank has sought to boost economic activity and investment in the euro zone by implementing four interest cuts last year. The ECB is expected to make another 25-basis-point trim when it meets later on Thursday to bring the key rate, the deposit facility, down to 2.75%.

Economists expect the central bank to make further interest rate cuts this year as fears over faltering growth trump concerns over stubborn inflation in the bloc.

In December,

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that the euro zone economy would grow by 1.1% in 2025, saying that it expects euro area GDP growth to “weaken somewhat in the short term, amid significant uncertainty.”

“Survey-based indicators relevant for activity, such as the Purchasing Managers’ Index (PMI) and business and consumer confidence indicators from the European Commission, remain subdued,” the central bank stated in December.

The ECB had expected the economy to grow by 0.2% in the fourth quarter of 2024 as the one-off factors supporting growth last summer, such as the Paris Olympics, faded, and amid continuing “subdued confidence, high uncertainty and geopolitical tensions.” The central bank anticipates GDP growth to be 0.3% in the first quarter of 2025.

Central bank policymakers will be mindful of inflationary pressures in the region, with the euro zone consumer price index ticking upward in recent months, hitting 2.4% in December.

Core inflation, which strips out volatile food and energy prices, was unchanged at 2.7% for the fourth consecutive month in a row. The central bank forecast the inflation rate in the bloc to come in at 2.1% this year.

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#Euro #zone #GDP

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