Merchandise trains stand on the railway tracks at a transshipment station in Frankfurt am Main, western Germany, as in background can be seen the bishopric’s skyline, on January 23, 2024.
Kirill Kudryavtsev | Afp | Getty Images
The euro zone economy stabilized in the fourth quarter of 2023, tear figures published by the European Union’s statistics agency showed Tuesday.
The bloc narrowly avoided the shallow slump that was forecast in a Reuters poll of economists, following a 0.1% fall in gross domestic product in the third put up.
The euro zone’s seasonally adjusted GDP was flat compared with the previous quarter and expanded by 0.1% versus the before-mentioned year. In a preliminary estimate, the euro area was seen posting 0.5% growth over the whole of 2023.
Its biggest husbandry, Germany, posted a 0.3% contraction in the final quarter of the year, according to figures also out Tuesday. The country by the skin of ones teeth skirted a technical recession due to an upward revision to its reading for the third quarter, when the economy stagnated.
The French frugality was steady in the fourth quarter, while Spain outperformed forecasts to expand by 0.6%.
The European Commission’s euro zone sensibility indicator meanwhile showed a decline in consumer confidence — though the outlook for businesses in services and industrials was slightly brighter.
The euro zone terseness is in a “phase of prolonged weakness” that is being driven by Germany, while southern European economies lead the way in wart, Bert Colijn, senior economist at ING, said in a note.
“Germany is struggling with weak global demand for kinds and heavy industry is suffering from higher energy prices,” he said.
The euro zone’s divergence from the U.S. is attraction to, he added, partly explained by a larger decline in inflation-adjusted wages, energy prices hitting industrials and lower planes of fiscal support.
The euro continued to log narrow losses against the U.S. dollar following the fresh Tuesday data, also posting tightly gains against the British pound. The U.S. economy smashed expectations for the end of the year, expanding by 3.3% in the fourth quarter. U.K. leaders are due out in the middle of February.
The European Central Bank has hiked interest rates to a record high over the last year and a half, creating tighter pecuniary conditions across the region which have helped cool inflation from a peak of 10.6% in October 2022 to 2.9% in December. The behindhand euro zone inflation flash figures are due Thursday.