Eurozone GDP grows by 0.3pc in fourth quarter, beating expectations
The euro zone economy expanded by 0.3pc in the fourth quarter of 2013 from the previous quarter, beating expectations.
The official data, published by Europe's statistics agency Eurostat, comes after the region posted growth of just 0.1pc in the third quarter - a significant slowdown from an expansion of 0.3 percent in the second three months of the year.
On a country level, the German and French economies grew at a similar pace in the final quarter of 2013, bridging the gap seen in recent quarters between the euro zone's two largest economies, as investment picked up in both regions.
France's economy grew 0.3pc in the final quarter of 2013, slightly more than the 0.2pc analysts had expected, after seeing no growth in the third quarter. Germany grew 0.4pc in the quarter, a faster growth rate than the 0.3pc growth consensus.
Meanwhile Italy's fourth-quarter gross domestic product (GDP) came in at 0.1pc on the quarter, meeting expectations.
The return to growth for the French economy means the nation has managed to escape falling back into recession. Finance minister Pierre Moscovici said "growth of 0.3pc for the whole of 2013: an encouraging number" on social media network Twitter.
The German Statistics Office said growth had picked up unexpectedly thanks to a rise in exports in 2013, as exports rose a lot more than imports.
Analysts were surprised by the acceleration in German economic growth, adding the positive data was something the euro zone had not seen very much of over the last few quarters.
"Is the German economy finally picking up? Recent monthly data had painted a rather confusing picture with strong soft data but disappointing hard data. Today's growth outcome is actually better than monthly hard data had suggested," said ING's Carsten Brzeski.
Jim McCaughan, CEO of Principal Global Investors, says that while the level of debt in the U.S. is sustainable due to the country's growth rate, the situation is different in Europe.
"Looking ahead, the German economy should gain further momentum. Filled order books and the latest inventory reductions bode well for industrial production in the coming months," he added.
Investment played a strong role in boosting both economies. A breakdown of figures showed that a surge in of 0.9pc in corporate investment helped drive growth in France, while in Germany the Statistics Office said "capital investment developed positively".
Data earlier this week showed French industrial production dropped 0.3pc in December from November, falling short of expectations, although the figure for the fourth quarter as whole was positive.
While better than expected, the weakness of France's recovery is adding to pressure on President Francois Hollande to deliver faster growth. The unpopular socialist has embarked on a shift to more business-friendly policies to bring down near-record unemployment, which is close to 11pc. Hollande is counting on a planned €30bn corporate tax break to ensure France does not fall too far behind other euro zone economies that are recovering faster.