Sunday 17 November 2019

Iberian upsurge helps return Eurozone to growth

Growth helped as Spain emerges from recession
Growth helped as Spain emerges from recession

Colm Kelpie

The Eurozone enjoyed a modest pick up in economic growth in the final three months of last year, helped by rising investment and exports.

This signalled that a recovery may be underway in the currency bloc, which has suffered from near stagnation and struggled to recover from the crisis.

The 19-member Eurozone grew by 0.3pc between October and December, and eked out growth of 0.9pc for the whole year, according to Europe's statistical agency Eurostat.

The data comes just a day after the European Central Bank announced it will start its landmark bond-buying programme next week and also upgraded its growth forecast for this year in the Eurozone to 1.5pc, from the 1pc in predicted as recently as December.

The Central Statistics Office (CSO) will publish fourth-quarter GDP data for Ireland on Thursday, as well as giving the preliminary estimate for 2014.

The Eurostat data, therefore, does not contain any information on Ireland.

Growth was driven by Germany, Europe's biggest economy, as well as by Spain and Portugal which returned to expansion mode after multi-year recessions.

Ireland is expected, however, to top the European growth table. Alan McQuaid of Merrion Stockbrokers yesterday predicted 2014 GDP growth for Ireland at 4.5pc.

The Eurostat data showed that Italy, France, and Greece continued to disappoint as economic output remained broadly stagnant compared to 2013.

Danae Kyriakopoulou, economist with the London-based Centre for Economics and Business Research (Cebr), said despite the optimism from ECB President Mario Draghi and his upgraded growth forecasts, markets remain unconvinced.

"Cebr has long been sceptical about the power of quantitative easing (QE) alone to kick-start the much-needed Eurozone recovery," she said.

"But although QE came quite late, it is still a step in the right direction and a glimpse of a light at the end of the tunnel the Eurozone has found itself in."

Irish Independent

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