Eurozone: Complete data confirms steady growth in Q4
March 7, 2017
The third estimate of GDP released by Eurostat revealed that growth was steady in the Eurozone in the fourth quarter. GDP increased a seasonally-adjusted 0.4% in Q4 over the previous quarter, which matched the second preliminary estimate. The result is also the same as Q3’s 0.3% expansion. A solid performance in the domestic economy drove the result, while the external sector dragged on growth.
Households continued to benefit from improving labor market conditions and private consumption ticked up in the fourth quarter. Private consumption grew 0.4% over the previous period (Q3: +0.3% quarter-on-quarter). In addition, a less austere fiscal position pushed government consumption up to 0.5% growth (Q3: +0.1% qoq). On top of this, fixed investment, which had been a weak spot in the past GDP figures, swung to growth and expanded 0.6%. Improved lending growth supported the figure and the positive result came despite heightened uncertainty due to Brexit, the surprise election of U.S. President Donald Trump and a hefty election schedule in the Eurozone.
A pick-up in global demand and a weaker euro helped push export growth to the best result since Q3 2015. Exports grew 1.5%, a notable acceleration from Q3’s 0.3%. Meanwhile, imports also gained steam, help by the buoyant domestic economy. Imports expanded 2.0%, contrasting Q3’s 0.1% contraction. Overall, the external sector subtracted 0.1 percentage points from GDP growth.
On an annual basis, GDP growth ticked down from Q3’s 1.8% to 1.7% in Q4, bringing full year growth in the euro area to 1.7%. The Eurozone’s recovery remained on track last year and data for 2017 suggest that activity is firming.