Eurozone GDP figures are rolling out this morning, and we've already got a pretty strong German number, with growth twice as fast as expected.
Here's how the scorecard looks so far:
- Germany's growth hit 0.7% in the final quarter, bringing overall growth for the year to 1.6%. (Only 0.3% growth in the final quarter was expected by analysts who also called for only 1% growth for the year.
- French growth was more disappointing. It came in as analysts expected, with a 0.1% increase in the fourth quarter, raising growth in 2014 to just 0.4%
- Italian GDP was flat in Q4, meaning a drop of 0.3% over the year. But that's better than the -0.1% and -0.4% for the quarter and the year respectively that analysts were expecting.
- We've already had Spain's GDP, which rose 2% year-on-year and 0.7% for the quarter, matching Germany.
Basically, the German economy surged upward in the final quarter of 2014. That 0.7% figure is very strong figure for the eurozone. It was almost twice as strong as economists were expecting.
We've already had some good economic news from Spain in the past month. Business surveys are strong and Spanish retail sales were the strongest in 11 years.
Probably most importantly, private lending is back in positive territory across the eurozone for the first time in two and a half years, which should give the economy a boost.
Let's put it in perspective. Things are not amazing. Unemployment across Europe is still above 11%, rising to above 20% in a significant portion of southern Europe. Few countries are back to their 2008 GDP levels.
But what we're talking about here is the direction of travel, not overall levels. The eurozone now has a bigger-than-expected QE programme to support growth, and it looks like there's a bit of an upswing already (QE starts in March). One of the big mistakes people made when the US and UK economies started to recovery was being over-pessimistic, after years of gloominess. Don't miss the early signs of an upturn.
Here's how German growth looks over the past few years. Can the current spike in momentum continue?
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