Thursday 7 March 2019 12:12 pm

Eurozone GDP growth falls below expectations confirming sluggish 2018

Eurozone GDP grew slightly in the final three months of last year but dropped sharply year-on-year, falling below expectations.

The EU’s statistical office Eurostat confirmed that GDP grew 0.2 per cent in the fourth quarter, up from 0.1 per cent the previous quarter.

Read more: Eurozone construction rebounds led by German recovery in February

But a year-on-year rise of 1.1 per cent came in below expectations, and well below 1.6 per cent in the previous quarter.

The quarterly rise was driven by household spending, investments, and imports and exports, according to Eurostat.

GDP fell in both Greece and Italy in the fourth quarter, while it remained static in Germany.

The final figures for 2018 GDP growth was 1.8 per cent, down from 2.4 per cent in 2017.

“The Eurozone appears to be catching the economic cold spread by China and the US, caused by trade tensions, and today’s drop in GDP to 1.1 per cent could just be the tip of the iceberg,” Centtrip analyst Stephen Hubble said.

The weak data comes just hours before a European Central Bank decision on interest rates along with the bank’s latest economic outlook.

Read more: Eurozone services output declines to five-year lows

While the ECB is expected to hold rates, the central bank could announce a new round of cheap loans to Eurozone banks.

Analysts said another Targeted Long-Term Refinancing Operation (TLTRO) could send the euro plunging.