The euro zone's meagre economic growth in the fourth quarter of 2004 was fuelled mainly by investment as household consumption marginally improved and export and import growth slowed, data showed today.
European Union statistics office Eurostat kept its fourth quarter gross domestic product growth estimate unchanged at 0.2 per cent, compared with the previous quarter, and at 1.6 per cent from the same period of 2003. For the whole of 2004 growth was 2.0 per cent.
The European Commission has recently said GDP in the 12-nation euro zone should expand at the same pace this year. Eurostat also revised its third quarter GDP growth estimate down to 0.2 per cent from 0.3 per cent, sending yet another signal about the fragility of the euro zone's economic health, which had been hit by the strong euro and high oil prices.
But in a sign that the worst may by over, the European Commission increased its euro zone GDP growth forecast for the second quarter of 2005 to 0.3-0.7 per cent from 0.2-0.6 per cent.
It kept its 0.2-0.6 per cent growth forecast for the first quarter of this year. By contrast, economic growth was 0.9 per cent in the United States in the fourth quarter.
The data are likely to cement expectations that the European Central Bank would leave its main interest rate unchanged at 2 per cent in the months ahead, especially after euro zone February inflation has just hit the bank's 2.0 per cent target.
Eurostat confirmed that euro zone growth had been dragged down by poor figures in Germany and Italy, where GDP had contracted by 0.2 per cent and 0.3 per cent, respectively.
France, the euro zone's second-biggest economy, saw a healthier growth rate of 0.8 per cent as the French were much more willing to open their wallets during the Christmas season.