Investing.com – Gross domestic product (GDP) in the euro zone held steady in the fourth quarter, according to preliminary official data released on Thursday.
In a report, Eurostat said that GDP rose a seasonally adjusted 0.2% in the October to December period, matching the prior reading and in line with the consensus forecast.
Year-on-year, GDP in the single currency bloc slowed to 1.2% in the fourth quarter, compared to the 1.6% expansion seen in the previous quarter.
Economists had expected growth of 1.2%.
“Although temporary effects from German car sector bottlenecks explain some of the growth drag, the overall economic environment, with a Chinese slowdown, Brexit and fragile risk sentiment in financial markets, also weigh on growth prospects,” economists from Danske Bank explained.
On a more positive note, ING economists pointed out that consumer confidence is no longer falling, “which at least offers some hope that it cannot only go downhill from here”.
“At this point, we think the risk of a recession this year still remains low, unless all downward risks materialize,” ING said.
“That said, the best now lies behind us, and Eurozone growth should come out between 1.0% and 1.5% in 2019, nothing to cheer about," they argued, adding that they now expect the European Central Bank to offer a new round of long-term financing for banks - known as TLTROs - by June.