Economy of the Eurozone Improves in Sharp Contrast to the UK

Photo by DonkeyHotey/Flickr

The eurozone published strong industrial production figures for December 2017, while growth information confirmed that the economy of the bloc experienced its fastest growth rate in a decade in 2017 – in sharp contrast to the situation in the United Kingdom.

The 19 countries which share the euro observed that industrial production expanded by 0.4 percent last December from November, bringing the year-on-year gain to 5.2 percent.

Economists that were polled by Reuters before the release of the new data had drafted in a monthly gain of 0.2 percent and an annual increase of 4.2 percent.

Separately, the statistics office of the European Union also confirmed that growth of the gross domestic product across the region had reached 0.6 percent during the final quarter of last year as compared to the previous quarter and that the GDP had increased by 2.7 percent as compared to the same period the year before.

Overall, that means that the GDP in 2017 increased by 2.5 percent – the fastest growth rate since the 3 percent that was recorded back in 2007.

Earlier last Wednesday, data revealed that the GDP of Germany, the biggest economy in the eurozone, improved by 0.6 percent during the quarter and 2.9 percent year-on-year during the fourth quarter of last year. The GDP of France increased by 0.6 percent and 2.4 percent respectively, and Spain improved by 0.7 and 3.1 percent respectively.

The said numbers give a sharp contrast to the situation in the United Kingdom, where the economy has been slowing down over the past year as the effect of inflation. It resulted from the steep decline in the value of the sterling in the wake of the Brexit vote in June 2016, has eroded the incomes of households.

Last January, a first official estimate revealed that the economy of the United Kingdom had improved by 0.5 percent during the last quarter of last year, bringing the growth for the year to 1.8 percent.

The Office for Budget Responsibility has forecasted the growth of the United Kingdom in 2018 to decrease to 1.4 percent, and 1.3 percent next year – showing weaker household consumption because of the higher inflation and weak investment from companies, as an outcome of Brexit-related uncertainty.