BRUSSELS, Jan 31 — Growth in the eurozone slowed sharply in 2019, official data showed today, after a turbulent year of Brexit uncertainty and trade spats with US President Donald Trump.
On the day that Britain finally quits the EU, the bloc’s official statistics agency announced the 19-member single currency zone grew 1.2 per cent over the year, down from 1.8 per cent in 2018 and well off the 2.7 per cent seen in 2017.
The figures come a week after European Central Bank president Christine Lagarde gave an upbeat assessment of the coming risks to the eurozone, saying uncertainty around international trade was beginning to clear thanks to an orderly Brexit and a US-China trade truce.
Growth in the fourth quarter was just 0.1 per cent, slowed by contraction of 0.1 per cent in France and 0.3 per cent in Italy, but Bert Colijn, an economist with ING bank, said some optimism was justified.
“With a bottoming out of manufacturing, modest fiscal improvements and some reversal of the inventory drawdowns, the base case is that eurozone GDP growth is set for a subdued recovery over the course of the year,” he said in a statement.
Meanwhile, eurozone inflation in January inflation picked up slightly to 1.4 per cent from 1.3 per cent in December, in line with the forecast of analysts surveyed by financial services provider Factset.
The figure is off the ECB’s target of just under two per cent, drawing a more downbeat assessment from Jack Allen-Reynolds, senior economist with Capital Economics, who warned that eurozone growth in 2020 would likely be “weaker than most expect”.
“This underlies our forecast that the ECB will eventually be forced to loosen (monetary) policy further, perhaps in the second half of the year,” he wrote. — AFP
