PwC comments on the latest Eurozone GDP data

Jan 31, 2020

Barret Kupelian, senior economist at PwC, comments on the latest Eurozone GDP data:

"Today’s flash estimate of Eurozone GDP growth for the last quarter of 2019 shows that the bloc grew at a rate of 0.1% quarter on quarter, which brings its average annual growth rate for last year to 1.2%.

This disappointing performance was not entirely unexpected, given that the Eurozone has been one of the economies most impacted by international trade disputes. 

While we don’t have a full national breakdown of the headline growth rate, some statistical agencies released estimates of the national GDP growth rate. In France, the economy shrunk by 0.1% quarter-on-quarter. However, without the inventory effect French GDP would have grown by 0.3% quarter on quarter. The Italian economy contracted in the last quarter of 2019, meaning that it didn’t grow at all last year. But in contrast, Spain continued to grow in the fourth quarter, translating to an annual GDP growth figure of 2%.

What does this mean about the Eurozone’s recent performance relative to the UK? The chart below compares the Eurozone’s economic performance relative to the UK, centred on the second quarter of 2016. Based on this measure, the Eurozone economy continues to outperform the UK mainly because the latter missed out on the synchronised upswing in economic activity in 2016/17."

 

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Source: PwC analysis of Refinitiv data

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