Euro GDP growth: We estimate the economy expanded by 0.4% q/q, which is above consensus of 0.2% q/q.
The main driver of our above-consensus expectation is higher growth in private consumption. Retail sales increased each month in Q4, boosted by the lower oil price, lower unemployment and a stabilisation in consumer confidence. Looking ahead, we expect private consumption to increase further and we estimate GDP growth of 1.5% in 2015 (consensus 1.15%).
Although investment is likely to have remained weak in Q4, the improved business sentiment and progress in industrial production point to stabilisation. Looking ahead, continued demand from increasing private consumption, fading uncertainty and political initiatives should support higher investment.
Exports performed reasonably well despite a decline in exports to Russia of around 20% y/y. Other regions compensated for the fall. In 2015, other regions should continue to support exports while they will also be strengthened by the weaker currency, which improves price competitiveness.
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