(Reuters) – Economic growth in Germany and France, the euro zone’s two largest economies, marginally exceeded expectations in the fourth quarter and offered hope of a more robust 2014.
The euro zone number is due at 5000 AM (1000 GMT) and forecast to show quarterly growth of 0.2 percent. Given the performance of its biggest constituent parts, that could be exceeded.
German growth accelerated to 0.4 percent on the quarter thanks to a rise in exports and capital investment, up from 0.3 percent in the previous three months.
The French economy expanded by 0.3 percent and statistics office INSEE revised up the third quarter figure to flat from -0.1 percent.
That meant France grew 0.3 percent over the course of last year, more than the government’s estimate of 0.1 percent.
Italy, now awaiting a new prime minister with Enrico Letta due to resign today having been forced out by his own Democratic Party, dragged itself back to growth for the first time since mid-2011.
Its economy expanded marginally by 0.1 percent. Over the whole of 2013, GDP contracted by 1.9 percent, the ISTAT statistics office said.
Italy has been one of the world’s most sluggish economies for more than a decade. Growth has averaged less than zero over the last 12 years. In 2014, the government forecasts growth of 1.1 percent.
The German Statistics Office saw mixed signals from the domestic economy, which has driven growth throughout most of the year, with public expenditure stable and private consumption slightly below the level of the previous quarter.
Capital investment developed positively, the Statistics Office said. However, a strong reduction in inventories put the brakes on economic growth.
The German Economy Ministry said on Wednesday it expected gross domestic product (GDP) growth of 1.8 percent in 2014 – more than four times faster than in 2013 as a whole.
The rise in capital investment is very positive and signals that the German economy is starting the new year well, said Johannes Mayr, an economist at Bayern LB.
ECB WATCHING
The European Central Bank kept policy steady earlier this month with President Mario Draghi declaring more information was needed before deciding on any action.
He cited fresh ECB staff forecasts which will be ready for the March policy meeting and the fourth quarter GDP numbers.
Spain has already reported fourth quarter growth of 0.3 percent, its second successive quarter of expansion. The government now expects growth this year of close to 1 percent, compared with an official forecast of 0.7 percent.
The Dutch economy grew by a solid 0.7 percent on the quarter, well above the market consensus. Austrian GDP rose 0.3 percent.
The French government expects growth will accelerate this year to at least 0.9 percent, driven by a rebound in company investment.
A breakdown of the fourth quarter French figures showed growth was driven by the first rise in corporate investment in two years. Public investment was even stronger and household spending also recovered.
Finance Minister Pierre Moscovici nonetheless described the economy’s strength as unsatisfactory and said faster growth was needed to create more jobs with unemployment at nearly 11 percent. ($1 = 0.7317 euros)
(Writing by Mike Peacock; Editing by Jon Boyle)
