By Paul Hannon
The eurozone economy grew at the weakest pace in four years during 2018, fueling growing concerns that the strength of the global expansion is faltering across several major countries, a worry underlined by preliminary GDP data released Thursday showing that Italy slipped into a technical recession.
The European Union's statistics agency on Thursday said economic growth in the 19 countries that use the euro was 1.8% last year, down from 2.4% in 2017, which was its strongest performance in a decade. However, there was a slightly pickup in the final three months of the year, as gross domestic product rose at an annualized rate of 0.9% compared with 0.6% in the three months through September.
That pickup was aided by Spain, where growth accelerated slightly as the year drew to a close. But the outlook for 2019 is for slower growth, with the German government on Wednesday slashing its growth forecast for the year to 1% from 1.8%, pointing to mounting geopolitical and trade risks.
The eurozone economy was hampered by a weakening of exports in 2018, driven by Turkey and the U.K., with Chinese demand also easing.
The Italy GDP figures showed that the Italian economy contracted in the final three months of last year, the second straight quarter of declining output.
That was partly due to a monthslong standoff between the government and the EU over plans to increase its budget deficit, which pushed borrowing costs higher and dented business and consumer confidence.
EUR/USD dropped after the eurozone data, falling to 1.1478 from 1.1491 beforehand.
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