Eurozone economic growth confirmed at four-year high in 2015 despite end of year slowdown

 
Chris Papadopoullos
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The Eurozone Crisis Deepens As Greece Attempts To Avoid Bankruptcy
A new Greek crisis was not enough to derail the Eurozone's recovery (Source: Getty)

The Eurozone economy grew at its strongest rate for four years in 2015 despite slowing toward the end of the year.

The economy was 1.6 per cent bigger last year than in 2014, according to data released by EU statistical office Eurostat this morning.

However, the economy expanded at a slower rate in the second half the year. The economy grew 0.3 per cent in final three months 2015. It had grown 0.6 per cent in the first three months and 0.4 per cent in the three months to June.

Growth in household spending dropped to 0.2 per cent in the final three months of the year while exports remained subdued. Investment growth climbed to 1.3 per cent, providing a boost to the final figure along with government spending, which rose 0.6 per cent.

"It was encouragingly led by a pick-up in total investment, which grew 1.3 per cent quarter-on-quarter. There was also marked growth of 0.6 per cent quarter-on-quarter in government spending, which was clearly lifted by spending on refugees," said economist Howard Archer from analysts IHS. However, Archer is cautious about the year ahead.

"We have recently trimmed our Eurozone GDP growth projection for 2016 to 1.6 per cent from 1.7 per cent, and the risks currently look to be slanted to the downside," he said.

Sluggish growth and low inflation – which has tumbled back below zero – has increased the likelihood of the European Central Bank boosting stimulus measures at its meeting on Thursday.

ECB chief Mario Draghi said in January that policy makers would "reconsider" their stance in March when the central bank's new growth and inflation forecasts are produced. He is expected to boost the €60bn-a-month asset purchase programme and cut the interest rate paid on deposits at the ECB further below zero.

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