Eurozone GDP growth beats expectations as inflation edges up

 
Emma Haslett
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Inflation and GDP edged higher as unemployment slid. (Source: Getty)

It's a good day for the Eurozone, which beat expectations on growth and unemployment today - while inflation edged up.

Figures published by Eurostat, the region's statistics authority, showed gross domestic product grew 0.5 per cent in the euro area, pushing inflation for the full year up to 1.8 per cent. Although it was slightly down from the previous year's two per cent, the figure beat forecasts of 1.6 per cent.

Meanwhile, unemployment in the eurozone fell to 9.6 per cent, against expectations of 9.8 per cent and down almost a whole percentage point from last year's 10.5 per cent. Among the European Union's 28 member countries the figure was 8.2 per cent, its lowest rate since February 2009.

And in a flash estimate, Eurostat said it expected inflation in the region to rise to 1.8 per cent in January, from 1.1 per cent in December.

That was largely driven by an eight per cent rise in energy prices, up from 2.6 per cent in December, although food, alcohol and tobacco rose 1.7 per cent, up from 1.2 per cent in the previous month.

Dennis de John, managing director at UFX.com, suggested the figures will be good news for European Central Bank (ECB) chief Mario Draghi.

“Draghi faces one of the most tumultuous times during his tenure at head of the ECB, though the latest figures will give him a faint glimmer of hope that the year ahead may not be as bad as some have predicted.

“Brexit remains the central focus of investors the world over and, as any semblance of clarity appears a long way off, the ECB will be hoping to keep the eurozone ticking along.

“Although French GDP held to expectations, consumer spending figures there and German retail sales results make for dire reading.

"With the added complication of uncertain financial policy emanating from Washington, Draghi certainly has his hands full.”

Read more: Is the Greek debt crisis about to heat up again?

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