Sluggish euro zone recovery confirmed in fourth quarter

Wed Mar 5, 2014 5:15am EST

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* Exports, investments drive euro zone recovery
    * January retail sales rebound is stronger than expected

    By Martin Santa
    BRUSSELS, March 5 (Reuters) - Rising exports and a gradual
improvement in investments were behind the euro zone's
stronger-than-expected growth in the last quarter of 2013, data
showed on Wednesday.
    The 9.5-trillion-euro economy rose by 0.3 percent in the
October-to-December period, a figure that compared to 0.1
percent growth in the previous three months, the European
Union's statistics office Eurostat said.
    The fourth-quarter expansion came on the back of a 1.2
percent rise in exports in the period and a 1.1 percent rise in
investments. 
    The improving economic outlook provides some breathing space
for the European Central Bank before Thursday's policy meeting.
The ECB is expected to show how it wants to fight disinflation
pressures that could threaten the recovery.
    Compared with the same period last year, the euro zone's
economy rose 0.5 percent in the fourth quarter, returning to
annual growth for the first time in two years.
    Europe's biggest economy Germany showed a robust 0.4 percent
expansion in the fourth quarter, when compared with the previous
three months, and growth of the second largest economy France
accelerated to 0.3 percent after being flat in third quarter. 
    The European Commission said last month it expects Germany
to accelerate away from France and Italy in 2014 as the euro
zone economy gradually recovers from its worst crisis.
    In a departure from the gloom of recent years, Brussels
slightly increased its growth prediction for the bloc's economy
to 1.2 percent this year from an earlier 1.1 percent.
    
    STRONG RETAIL SALES
    A separate data release on Wednesday showed a much stronger
rebound in retail sales in January. The euro zone's volume of
retail sales jumped 1.6 percent on the month after a revised 1.3
percent drop in December.
    Compared with the same period of the last year, there was a
1.3 percent growth in January, following a revised 0.4 percent
drop in December.
    Analysts polled by Reuters expected a 0.8 percent rise on
the month.
    Germany saw a 2.5 percent monthly jump in January and France
booked a 1.2 percent rise.
    Despite a gradual pick-up in growth, household demand across
the euro zone remains weak as the bloc suffers from near record
unemployment, notably among young Europeans, keeping a lid on
Europeans' spending.
    But in a sign of the improving situation in southern Europe,
Portugal witnessed a 6.7 percent rise in volume of retail sales
in January, when compared with December.
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