Higher spending by households and governments helped propel the euro-area to its 11th successive quarter of growth even as net trade suffered amid a slowdown in China and other emerging markets.
Consumption in the private sector rose 0.2 percent in the three months through December, while that of the public sector expanded 0.6 percent, the European Unionâ€™s statistics office in Luxembourg said on Tuesday. Gross fixed capital formation increased 1.3 percent, while exports rose 0.2 percent. Overall the economy grew 0.3 percent in the fourth quarter, in line with an initial Feb. 12 estimate and matching momentum in the previous period.
The data comes the day before a hotly anticipated gathering of European Central Bank officials in
On Thursday, the Governing Council is expected to announce still more stimulus in a bid to boost inflation in the 19-country bloc. Nearly three-quarters of the economists surveyed by Bloomberg expect the central bank to expand monthly bond purchases on Thursday, and all but one see the deposit rate being cut further below zero.
The ECBâ€™s review of stimulus comes â€œagainst the background of increased downside risks to the earlier outlook amid heightened uncertainty about emerging market economiesâ€™ growth prospects, volatility in the financial and commodity markets, and geopolitical risk,â€ ECB President Mario Draghi said in letter to a member of the European Parliament published earlier this month.
While a drop in the price of oil and other commodities has boosted real incomes in the euro area, thereby facilitating private consumption and shoring up growth, countries as far flung as Saudi Arabia, Russia and Canada are feeling the pain of the raw materials slump.
Chinaâ€™s economy has suffered a slowdown, which in turn has hurt other emerging markets.
In a sign the pace of expansion is slowing in the euro area, the purchasing managers index for manufacturing slipped in February, with the price gauge dropping to the lowest in almost three years. The fact that Germany, France and Italy â€” the regionâ€™s three largest economies â€” reported falling output prices is likely to compound the concern among euro-area officials who are far from meeting their 2 percent inflation goal.
The Frankfurt-based central bank sees growth of 1.7 percent this year, picking up to 1.9 percent in 2017. Draghi will present an update on that forecast on Thursday.