Euro Growth Indicator

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Growth momentum in the Euro Area continues to be weak in winter 2015

Euro Area growth remains weak in the winter 2014/2015 according to the February EUROGROWTH Indicator calculated by the Euroframe group. The quarter-to-quarter growth rate for the fourth quarter of 2014 is forecast at 0.3 per cent, unchanged from the January estimation. The forecast growth rate for the first quarter of 2015 inched up by 0.1 percentage points to 0.4 per cent. The year-on-year growth rates are 0.8 and 0.9 per cent, respectively.

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A slight improvement in the euro area growth outlook

The EUROGROWTH indicator forecasts are unchanged in January 2015 from December 2014. According to the indicator, euro area GDP will increase by 0.3 per cent in both the last quarter of 2014 and the first quarter of 2015 which is only slightly better than growth rates released for the two previous quarters. On a year-on-year basis, the growth path would remain very weak at less than 1 percent.

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Near-term outlook for the euro area has brightened up a bit

The December EUROGROWTH indicator suggests that the risks of the euro area economy slipping into the third recession in five years have diminished, although the growth momentum remains modest. According to the latest estimation, growth in the euro area will increase slightly to 0.3 per cent in the final quarter of 2014 and in the first quarter of 2015, from the slow pace of growth of 0.1 and 0.2 per cent, respectively, realised in the two quarters before.

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Fears of a ‘triple dip’ in the euro area

The persistent weakness of to the EUROGROWTH indicator raises concerns that a sustained recovery in the euro are economy may again fail to materialize. According to the indicator, growth will remain weak at 0.2 per cent in the last two quarters of 2014. On a year-on-year basis, the expansion path would continue to decelerate, from its former peak at 1.2 percent in 2014Q1 to 0.7 in the final quarter of 2014.

More information on this topic on our Euro Growth Indicator section.