Eurozone Economy Stagnates In Q4

(RTTNews) - Euro area economy stagnated in the fourth quarter, following a downward revision, as positive contributions from the government consumption and foreign trade were offset by contractions in household spending and investment.

Gross domestic product remained flat sequentially in the fourth quarter after expanding 0.4 percent in the preceding period, data from Eurostat showed Wednesday.

The fourth quarter figure was revised down from 0.1 percent growth estimated on February 14.

The year-on-year economic growth rate eased to 1.8 percent from 2.4 percent in the third quarter. The annual growth rate for the fourth quarter was downgraded from 1.9 percent.

GDP expanded 3.5 percent for the whole year of 2022 after rising 5.3 percent in 2021.

The expenditure-side breakdown showed that household spending fell 0.9 percent. That offset a similar 0.9 percent increase in the third quarter. Meanwhile, government spending grew 0.7 percent and reversed a 0.2 percent fall.

Gross fixed capital formation logged a contraction of 3.6 percent that followed the third quarter's 3.9 percent increase.

Exports logged a slower growth of 0.1 percent after a 1.7 percent rise in the preceding period. At the same time, imports slid 1.9 percent in contrast to the 4.2 percent rise a quarter ago.

Productivity based on persons increased 0.3 percent from the last year in the fourth quarter and based on hours worked it fell 0.3 percent annually.

Further, data showed that employment increased 0.3 percent sequentially. That was the same pace of growth as seen in the third quarter. Employment gained 1.5 percent on a yearly basis after a 1.8 percent increase.

The European Commission forecast the currency bloc to grow 0.9 percent this year and the rate is projected to climb to 1.5 percent next year.

The International Monetary Fund projected growth in Eurozone to bottom out at 0.7 percent in 2023 before improving to 1.6 percent next year.