Euro zone GDP This fall 2024


An worker locations an merchandise within the window show at a delicatessen within the Piazza Campo di Fiori in Rome, Italy, on Tuesday, Dec. 6, 2016.

Bloomberg | Bloomberg | Getty Photographs

The euro zone economic system noticed zero progress within the fourth quarter, flash figures from the European Union’s statistics company Eurostat confirmed Thursday.

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

The bloc-wide information comes after worse-than-expected progress prints from the euro zone’s two largest economies, Germany and France. Earlier on Thursday, official information confirmed that Germany’s gross home product fell 0.2% within the fourth quarter, whereas France’s economic system additionally shrank barely over the identical interval. Italy’s economic system additionally flatlined quarter-on-quarter, information confirmed earlier Thursday.

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

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

The central financial institution has sought to spice up financial exercise and funding within the euro zone by implementing 4 curiosity cuts final yr. The ECB is anticipated to make one other 25-basis-point trim when it meets afterward Thursday to convey the important thing fee, the deposit facility, all the way down to 2.75%.

Observe CNBC’s ECB reside weblog right here: European Central Financial institution set to trim rates of interest for fifth time since June

Economists anticipate the central financial institution to make additional rate of interest cuts this yr as fears over faltering progress trump issues over cussed inflation within the bloc.

“The stagnation in euro-zone GDP in This fall helps our view that the area’s financial prospects are worse than most suppose. We anticipate this to immediate the ECB to chop rates of interest by extra this yr than is discounted available in the market,” Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics mentioned in emailed feedback following the info launch.

In December, the central financial institution forecast that the euro zone economic system would develop by 1.1% in 2025, saying that it expects euro space GDP progress to “weaken considerably within the brief time period, amid important uncertainty.”

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

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

The European flag flutters subsequent to the headquarters of the European Central Financial institution (ECB) in Frankfurt am Principal, western Germany, on April 11, 2024, forward of an ECB press convention on Eurozone financial coverage.

Kirill Kudryavtsev | Afp | Getty Photographs

Central financial institution policymakers might be conscious of inflationary pressures within the area, with the euro zone client value index ticking upward in latest months, hitting 2.4% in December.

Core inflation, which strips out unstable meals and vitality 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 return in at 2.1% this yr.

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