Eurozone GDP growth holds steady at 0.4 pct q/q in Q4

Eurozone final GDP data for the fourth quarter released by Eurostat on Tuesday showed that economic growth in the eurozone held steady at 0.4 percent q/q, driven along by a healthy rise in investment and consumer spending. The reading was inline with a flash estimate and matched the pace of growth in Q3.

On a yearly basis, GDP growth slowed marginally to 1.7 percent from 1.8 percent in the third quarter. The expenditure-side breakdown of GDP showed household spending has been powering the eurozone’s economies over the last year and rose by 0.4 percent in the quarter, while investment also showed signs of life up by 0.6 percent after contracting 0.7 percent, said Eurostat.

In the EU-28 group of nations, GDP was up 0.5 percent compared with the previous quarter and 1.9 percent from the fourth quarter of 2016. Over the course of 2016, GDP rose by 1.9 percent in the EU-28. Estonia was the fastest growing economy in the 19 member bloc, while Greece remained the traditional laggard.

Pantheon Macroeconomics said: "Survey data suggest that GDP growth will accelerate in Q1, but the hard data so far suggest this forecast is too upbeat. We worry about the hit to consumers’ spending from weak real wage growth, but investment should continue to perform well."