Eurozone GDP data for the first quarter shows continued slowdown in growth and demand

Eurozone GDP data for the first quarter shows continued slowdown in growth and demand

Eurozone statistics agency Eurostat will release first quarter GDP data for the single currency area today. Quarterly growth is forecast

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Photo: Reuters

Eurozone statistics agency Eurostat will release first quarter GDP data for the single currency area today.

Quarterly growth is forecast to remain between 0.2% and 0.3%. Transatlantic trade tensions and uncertainty over Brexit made an impact in the fourth quarter of 2018, when growth collapsed to 0.1%. This has raised fresh concerns that the European Central Bank has withdrawn stimulus too early, making it likely that it will be forced to further delay its decision to raise interest rates until at least 2020 and introduce new stimulus measures.

Germany nearly missed a recession in the last three months of 2018. While consumer spending and a tighter labour market is expected to prop up growth this quarter, a continued slowdown in the region’s largest economy, while unlikely, would hit economic activity in most Eurozone states.

As demand and export growth decelerates from the higher rates of 2017 and 2018, the ECB is expected to unleash a new round of stimulus to the regions banks to spur lending and economic activity in the coming months. However, until broader questions surrounding Brexit and US trade policies are answered, growth is likely to remain below 1% for the coming year.

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