Macro Focus - Euro area GDP and HICP
Disappointing Euro area data for the final quarter of the decade

Euro area quarterly growth has been disappointing at barely 0.1%. It confirmed our forecast that EA economy expanded 1.2% in 2019 – the slowest pace since 2013. The data for the last quarter was mixed overall. France and Italy surprised on the downside, the effects of protests and industrial spill overs form Germany respectively, were more pronounced than expected. Germany held up better, while Spain shone some light in overall gloomy quarter. The rest of EA has probably grown slightly below 0.3% q/q.

In January prices rose overall by 1.1 % y/y. Core inflation was 1.1 % in January, down from 1.3% in December, according to a flash estimate from Eurostat. Headline inflation is unlikely to get a lot of support from energy prices this year. The growth rate in core prices continues to be well below the ECB’s target. Core inflation is still stubbornly stuck at levels around 1%. However, continued improvement in EA labour market, will continue to produce prices pressures. Euro area unemployment is just 0.1% away from repeating the record low of 2008 and it should bring price pressures given enough time.

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For more information about this report, please contact:

Vytenis Šimkus, +370 687 17870,;

Sonja Liukkonen,+3584009821,

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