Sunday August 31, 2014 Search
Weather | Athens
31o C
24o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Euro-area growth eases pressure on Draghi for stimulus

The euro-area economy expanded more than forecast in the final quarter of 2013, led by Germany and France, easing pressure on the European Central Bank to take action next month to counter low inflation and spur growth.

Gross domestic product in the eurozone rose 0.3 percent after a 0.1 percent increase in the third quarter, the European Union’s statistics office in Luxembourg said on Friday. That beats the median forecast of 0.2 percent in a Bloomberg News survey of 41 economists. For the full year 2013, GDP fell 0.4 percent.

ECB President Mario Draghi on Feb. 6 put investors on a month’s notice for further economic stimulus, saying the Frankfurt-based central bank needed “to get more information” on the recovery before making any decision. “We are willing and we are ready to act,” Draghi said after the ECB held its benchmark interest rate at a record-low 0.25 percent.

Friday’s GDP report “slightly eases some of the appreciable pressure on the ECB to take immediate further stimulative action,” said Howard Archer, chief European and U.K. economist at IHS Global Insight in London. “Nevertheless, we expect persistent very low euro-zone consumer price inflation, ongoing difficulties in building growth momentum and still-tight euro- zone credit conditions will prompt further action from the ECB.”

The euro extended gains against the dollar after today’s data were released, trading at $1.3697 at 12:12 p.m. in Brussels, up 0.1 percent on the day.

Germany, Europe’s largest economy, fueled the expansion with 0.4 percent growth in the fourth quarter, while French GDP rose 0.3 percent. Both results exceeded economists’ forecasts.

“Germany remains the economic stronghold of the euro zone,” Carsten Brzeski, an economist at ING Group NV in Brussels, said in an e-mailed statement. “Looking ahead, the German economy should gain further momentum. Filled order books and the latest inventory reductions bode well for industrial production in the coming months.”

Italy’s economy grew 0.1 percent after stagnating in the third quarter, Friday’s data showed. Still, the country’s recovery is “weak and uncertain,” Bank of Italy Governor Ignazio Visco said on Feb 8. Dutch GDP rose 0.7 percent.

The news from the euro area’s periphery was generally positive, with Spanish and Portuguese GDP up 0.3 percent and 0.5 percent, respectively. In Cyprus, the economy shrank 1 percent from the third quarter. Greece’s contraction slowed to an annual 2.6 percent in the fourth quarter, based on non-seasonally adjusted data.

Friday’s report added to signs that the euro area’s nascent recovery is gaining momentum. Factory output expanded faster than initially estimated in January, and economic confidence increased for a ninth month, led by the services industry.

The recovery is starting to be felt by some of its biggest companies. Renault SA, Europe’s third-largest carmaker, said 2013 operating profit jumped 59 percent as low-cost models from the Dacia brand pushed delivery growth and the company lowered costs.

Daimler AG, the third-largest maker of luxury vehicles, posted a 45 percent surge in fourth-quarter profit. Alcatel- Lucent SA, the French network supplier, reported its first quarterly profit in two years on Feb. 6.

Not all the signs are encouraging, however. The euro area’s non-seasonally adjusted trade surplus narrowed to 13.9 billion euros in December from 17 billion euros a month earlier, a separate Eurostat report showed.

Industrial production slipped 0.7 percent and retail sales dropped 1.6 percent in December from a month earlier. Inflation remained below half of the ECB’s ceiling in January, driven by falling energy prices.

“We continue to expect the key ECB interest rates to remain at present or lower levels for an extended period of time,” Draghi said last week. “This expectation is based on an overall subdued outlook for inflation extending into the medium term, given the broad-based weakness of the economy and subdued monetary dynamics.”

The ECB will publish quarterly macro-economic forecasts next month, including its first inflation prediction for 2016, which in the past have provided supporting evidence for further easing.

Draghi said that ending the absorption of crisis-era bond purchases was one option for further action. Other possibilities include issuing fresh long-term loans to the region’s banks.

[Bloomberg]

ekathimerini.com , Friday February 14, 2014 (14:08)  
Disappearing inflation heightens Draghi concerns
Ministry launches work experience program for unemployed graduates
Tax burden in Greece among EU’s heaviest, study reveals
Coalition bent on protecting weaker groups
Traveling on public transport in Athens gets cheaper
Commuters will pay 20 cents less for tickets allowing them to use all modes of public transportation in Athens as of Monday, though they will be valid for 70 minutes rather than 90 as was th...
Push made for cuts in education as merger scheme fails
Finance Ministry officials are pressing the Education Ministry to cut costs after it emerged that a program for merging university and technical college departments failed to save 68 million...
Inside News
SOCCER
Tough draw for Greek sides in Europe League Greek stage
Following Thursday night’s high, when all three Greek teams competing in the Europa League made it into the group stage of the competition, a harsh reality struck Friday as they found out wh...
JUDO
Greek judoka Iliadis triples up as Aguiar stuns Tcheumeo
Greek star Ilias Iliadis claimed his third world title in the under-90kg category in Chelyabinsk on Friday as Brazilian Mayra Aguiar and Colombian Yuri Alvear won gold in the women’s under-7...
Inside Sports
COMMENTARY
Keeping an eye on international developments
The Ukrainian crisis may herald the start of a second Cold War, while there is no shortage of analysts comparing the current international climate to that of 1914 in the runup to World War I...
EDITORIAL
A few good men
It gives us a great deal of hope that we have a new batch of mayors and regional authorities, as well as university rectors who represent the voice of reason and prudence and are unafraid to...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Traveling on public transport in Athens gets cheaper
2. Push made for cuts in education as merger scheme fails
3. Gov’t aims to curb measures, secure loans, allow tax relief
4. DIMAR chief Kouvelis hints about presidency
5. French expert says Crete crocodile in good health, aged 4-7
6. Tensions mar regional ity swearing-in ceremony
more news
Today
This Week
1. Keeping an eye on international developments
2. A few good men
3. Disappearing inflation heightens Draghi concerns
4. Two men drown off Crete coast in strong tides
5. Traveling on public transport in Athens gets cheaper
6. Push made for cuts in education as merger scheme fails
Today
This Week
1. Attack on gay couple in Athens leaves one man needing surgery
2. Purification rituals
3. The battle against progress
4. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
5. Strong undersea quake occurs off island of Milos, felt in Athens
6. Athens finalizes Paris talks goals
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.