Eurozone growth slows fuelling fears of global slowdown
The eurozone economy has slumped to a snail’s pace, with the bloc slowing to its lowest pace of growth in four years in the fourth quarter of 2018, helping push European stocks lower on Thursday.
The eurozone economy grew by just 0.2% during the fourth quarter (Q4) 2018, representing the lowest pace of growth the 19-country bloc has seen in the last four years, according to European statistics organisation Eurostat.
Meanwhile, GDP rose by just 0.3% across the EU 28 during Q4 last year, compared with the previous quarter. In the third quarter of 2018, GDP had also grown by 0.2% in the euro area and by 0.3% in the EU28.
Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.2% in the eurozone and by 1.5% across the EU28 in the fourth quarter of 2018, after rising 1.6% and 1.8% respectively in the previous quarter.
According to a first estimation of annual growth for 2018, GDP grew by 1.8% in the euro area and 1.9% in the EU28.
Italy falls into recession
Of the big four eurozone economies, Italy is increasingly looking like the new sick man of Europe, with the data showing that the country fell into a technical recession in the final quarter of 2018.
Italy’s GDP fell by 0.2% in Q4 compared with the previous quarter after the country’s economy contracted by 0.1% - exceeding economic forecasts which predicted a decline of just 0.1%.
With fears rising of a global economic slowdown and slowing economies across the eurozone, the situation in Italy is likely to exacerbate, with the country already struggling to deal with its banking crisis and the amount of bad debt on their balance sheets.
European stocks edge lower amid growth fears
Following the news of slower growth in the final quarter of last year, the pan-European Stoxx 600 slid 0.6% in late-afternoon trading on Thursday as fears mount over the economic outlook for the eurozone.
The DAX and CAC 40 edged lower on Thursday too, while the FTSE 100 edged close to a three week-high, bolstered by oil and gas producer Royal Dutch Shell recording a strong set of results that saw its share price climb 3%.
German banks have had a tough day’s trading, with Deutsche Bank and Commerzbank seeing their share prices slide, with the former falling as much as 5% after planned merger plans for the two lenders were leaked on Thursday.
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