Monday, February 16, 2015

Data Insight: Euro zone GDP

Key points:

  • December quarter Euro zone GDP came in at a better-than-expected +0.3%. The market consensus expectation was for an increase of +0.2%. Annual growth now stands at +0.9% for the calendar year, up from +0.8% in the year to September.
  • The country breakdown fits our go-forward expectation of relatively strong growth from Germany (a better-than-expected +0.7% over the quarter), strong growth off a low base in the countries that have been hit hardest by austerity (Spain +0.7%, Portugal +0.5%) and low growth from the serial non-reformers (Italy 0.0%, France +0.1%).
  • There is not much in the way of component data at this point apart from France which showed strong export growth, while it appears Germany saw both strong private consumption and investment spending.
  • Looking ahead we expect a continuation of low positive quarterly growth rates supported by easier monetary conditions and stronger personal consumption as a result of the lower oil price. We continue to expect annual average growth of 1.2% in 2015.