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The eurozone economy expanded by 1.5% in 2015, the statistics agency Eurostat has announced.
In Q4 of 2015, the 19 countries that use the euro grew 0.3%, compared with the previous three months, Eurostat has said.
The 28 countries of the EU also grew 0.3% in Q4, to a GDP growth rate of 1.8% for the full year.
Growth slowed during 2015, suggesting that more action may be needed to stimulate economies from the European Central Bank (ECB).
Eurostat also announced on February 12 that industrial production had fallen 1% in December compared with the previous month, both for the eurozone and the EU.
Year on year, it fell 1.3% in the eurozone and 0.8% in the EU.
The biggest contraction in GDP came in Greece, where the economy shrank 0.6% in Q4 of 2015, which was better than had been expected.
However, the contraction in Q3 turned out to have been bigger than previously thought, being revised from 0.9% to 1.4%.
Germany’s economy expanded by 0.3% in Q4 of 2015 to an annual rate of 1.7%.
The German statistics agency said that government spending was “markedly up”, while household consumption rose slightly.
The figures follow surprisingly poor industrial production data for December 2015.
Japan’s economy has shrunk 0.8% on an annualized basis in Q3 of 2015 and fell back into recession.
The preliminary data means the world’s third-largest economy has contracted for a second consecutive quarter, marking a technical recession.
Japan’s economic growth was expected to decline after it fell a revised 0.7% in Q2 on weak domestic demand.
The country has been in recession four times since the global financial crisis.
Photo EPA
On a quarterly basis, growth fell 0.2% in the third quarter from the previous one, weaker than forecasts of a 0.1% decline.
The seasonally adjusted figure was also much lower than expectations of a 0.2% drop.
According to economists, the weak data will put more pressure on the government and central bank to continue to stimulate the economy.
Japanese companies continue to be wary of using their record profits to raise wages and invest in the economy – a major challenge for Prime Minister’s Shinzo Abe’s “Abenomics” policies.
Business spending fell 1.3%, against forecasts of a 0.4% decrease. It also marked the second quarter in a row of declines.
However, private consumption, which accounts for 60% of the economy rose 0.5% from the previous quarter.
Consumer spending has picked up from the hit it took last year from an increase in sales tax in April, which contributed to the recession in 2014.
Despite the declining growth, the government is positive that a recovery is underway.
In reaction to the growth figures, the benchmark Nikkei 225 index was down 1.1% to 19,372.98 points in early trade in Tokyo.
US economic growth slowed sharply in Q3 of 2015.
According to the Department of Commerce, the US gross domestic product (GDP) grew at an annualized pace of 1.5% in Q3 of 2015, down from a rate of 3.9% in Q2.
The slowdown was partly due to companies running down stockpiles of goods in their warehouses.
On October 28, the Federal Reserve kept rates unchanged and said the economy was expanding at a “moderate” pace.
Low oil prices have hit American energy companies so far this year.
However, lower fuel prices have been good news for consumer spending, which accounts for more than two-thirds of US economic activity.
Consumer spending grew at 3.2% in Q3, down from 3.6% in the second but still a strong reading.
Analysts said that the running down of warehouse stockpiles in Q3 was likely to be a temporary effect and they expected growth to accelerate again in Q4.
For several months there has been intense debate about when the Fed will raise interest rates, and now the focus is on its last meeting of the year in December.
The Fed has said in past statements that it expects to raise rates in 2015, and that labor market participation, inflation and the global economy would be the key factors in its decision.
In its latest statement on October 28, the Fed said: “In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2% inflation.”
However, the Fed dropped comments, which had been used in the previous month’s statement, that weaknesses in the global economy could affect the US.
Financial markets interpreted this as a sign that the Fed might be more likely to raise rates in December.
According to latest official figures, the German economy slowed by more than expected in Q1 2015, growing by just 0.3%.
That compares with growth of 0.7% in Q4 2015, and was below analysts’ estimates of 0.5%.
Meanwhile, the French economy grew at its fastest rate in nearly two years, expanding by 0.6% in Q1 2015.
The growth figure is the strongest since Q2 2013, when France’s economy expanded by 0.7%.
Last month, INSEE said French consumer spending grew by 1.6% in Q1 2015, boosted by lower oil prices and a weaker euro.
French industrial production grew at its fastest pace for four years in the first quarter, INSEE added.
Despite private consumption and investment in construction and industrial equipment rising. Germany saw its exports fall which held economic growth back.
The German Federal Statistics Office also released inflation data which showed consumer prices rose by 0.5% in the year to April, up from 0.3% in March.
The figure was a marginal upward revision from the first estimate of 0.4%.
Inflation in German, as in the rest of the eurozone, remains stubbornly below the European Central Bank’s (ECB) target of just below 2%. The bank launched a €60 billion monthly bond buying program in March to try to stimulate the region and avoid deflation.
Italy’s economy grew slightly more than expected in the first quarter, fuelling hopes of a recovery.
The economy expanded by 0.3% in Q1 2015 having been flat in Q4 2014 and was flat on an annual basis official figures showed, beating analysts’ forecasts for 0.2% growth.
It is the first time the Italian economy has grown since Q3 2011.
An estimate of economic growth across the whole of the eurozone is due later.
At the opening of its annual parliament session, China has announced a growth target of 7.5% and plans to raise its defense budget by 12.2%.
China’s PM Li Keqiang said that economic development was the central task of the government, but “painful structural adjustments” were needed.
Japan voiced concern at the defense move, citing a “lack of transparency”.
Li Keqiang also pledged to “declare war” on pollution, fight corruption “without mercy”, and “crack down” on terrorism.
The congress marks one year since Xi Jinping was confirmed as president.
China revealed plans to raise its defense budget by 12.2 percent (photo Reuters)
The 10-day meeting of around 3,000 legislators from delegations across China began on Wednesday.
As parliament opened PM Li Keqiang presented a work report highlighting targets for China’s economy this year.
He said that the government’s “work got off to a good start” but admitted that “there are still many problems that people are unhappy about”.
According to the speech, the government will aim to keep inflation at about 3.5%, while boosting domestic growth and carrying out “people-centred urbanization”.
The growth and inflation targets were widely expected. The growth rate target in 2013 was also 7.5%.
Correspondents say the fact that the growth target for 2014 has not changed will lead some to question how serious China is about embracing economic reforms, which would involve lowering the growth rate.
Implementing reforms to tackle local government debt was also expected to be a priority.
The latest military budget boost comes amid tensions between China and many of its neighbors, including Japan and the Philippines, over disputed territories.
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China’s gross domestic product (GDP) expanded 7.7% in 2013 from a year ago, the slowest pace of growth since 1999, official figures show.
Chinese economy is the world’s second largest.
The growth rate was higher than the government’s target of 7.5% and the same as in 2012.
The data highlights the challenge policymakers face in sustaining China’s high growth rate as they look to rebalance the economy.
Many analysts expect the country’s growth rate to slow as it takes steps to move away from an investment-led growth model to one driven by domestic consumption.
China’s growth rate slowed to an annual rate of 7.7% in the October-to-December quarter, down from 7.8% in the previous three months.
“The figure showed China’s economy had touched the bottom in the third quarter of 2013 and then stabilized in the end of last year,” said Li Huiyong, an economist with Shenyin & Wanguo Securities in Shanghai.
“We expect the trend will continue in 2014 as the policymakers [are] determined to push forward the reforms to maintain stable economic growth.
“We maintain our 2014 GDP growth forecast of 7.5% as we still need to be on guard for the risks from debt problems in the economy.”
China’s economy grew at its slowest pace in 14 years in 2013
A government-led investment boom has been a main factor driving China’s growth in recent years.
Chinese banks, especially the big four state-owned lenders, lent record sums of money in the years after the global financial crisis in an attempt to sustain the country’s high growth rate.
However, there have been concerns that part of that money has gone towards unproductive investments and that banks may not be able to recover those loans.
The fear among many is that a jump in bad loans – ones that cannot be repaid – would not only hurt the country’s banking sector, but also have a big impact on its overall growth.
There are also concerns over the growth of shadow banking – lending by non-banking companies – in the country.
Critics have warned that shadow banking makes credit less transparent and poses a major risk to China’s economic growth.
Earlier this month, various media reports indicated that China had drafted rules calling for greater supervision and monitoring of the shadow banks.
Banks have been told to publish data on 12 key indicators, including off-balance-sheet assets, to enhance their transparency.
Many analysts have said that curbing lending growth to address these concerns could would probably have a negative impact on China’s economic growth.
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The Organization for Economic Co-operation and Development (OECD) has cut global growth forecasts for 2013 and 2014 after weak prospects in emerging markets.
Global GDP for 2013 is now expected to grow by 2.7%, down from 3.1% forecast in May.
However, the OECD said global economic growth would speed up by 2015.
The OECD also revised down its global growth forecast for 2014, which it now estimates at 3.6%. In May, it had forecast 4%.
In a first estimate for 2015, it predicts growth of 3.9%.
The OECD said “weakness” in the banking system was a “major drag” on growth in the euro area.
OECD has cut global growth forecasts for 2013 and 2014 after weak prospects in emerging markets
The “potentially catastrophic crisis” over the debt ceiling in the US and “strong” market reaction to its suggestion of tapering had also unsettled confidence, it said.
OECD chief economist Pier Carlo Padoan said: “Brinkmanship over fiscal policy in the United States remains a key risk and uncertainty.”
Carlo Padoan said hitting the debt ceiling could “knock the US and the global recovery off course”.
He called for monetary policy in the US to “remain accommodative for some time”.
The global economy would act as an “amplifier” for negative shocks from a “stronger slowdown” in emerging markets, Carlo Padoan said.
He cited population trends in emerging economies, and the narrowing gap with advanced economies, as behind the “fragility”.
“Downside risks dominate and policy must address them,” he said.
Carlo Padoan said high levels of public debt in Japan created risks, but commended its export growth, rising consumer spending and rebound in business investment.
He warned governments about the risks of complacency as recovery gained momentum.
“Policy inaction or mistakes could have much more severe consequences than the turbulence seen to date and jeopardize growth for years to come.”
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Argentina’s President Cristina Fernandez de Kirchner has criticized her country’s elite for trying to create a negative image of her government.
“These small sectors have done well through history, they have kept the lion’s share,” Cristina Fernandez said in an interview with state television.
The president added that most Argentines are better off now than when she came to power.
“Argentina is growing by 5% a year in a world that is collapsing,” she said.
She accused the country’s media of misleadingly “creating an image people believe in”.
“Many want to go to back to the Argentina of the past, where labor cost was much lower and profit margins from speculation much higher,” Cristina Fernandez de Kirchner told Television Publica.
She said privileged sectors in Argentina “have failed to learn from history, or believe that history can be repeated indefinitely.”
Argentina’s President Cristina Fernandez de Kirchner has criticized her country’s elite for trying to create a negative image of her government
Cristina Fernandez de Kirchner’s government had reduced unemployment and raised the standard of living, she said, through successful development and growth public policies.
She said Argentina’s transformation began when her late husband, Nestor Kirchner, took office as president in May 2003.
Nestor Kirchner took over a country recovering for the financial collapse which culminated in street riots at the end of 2001.
Argentina enjoyed several years of strong economic growth during his government.
Nestor Kirchner was succeeded by Cristina Fernandez, who was first elected in 2007 and re-elected in 2011 with 54% of the vote.
But her popularity has since declined, according to opinion polls, and protesters have taken to the streets to denounce widespread corruption and high inflation.
Cristina Fernandez de Kirchner has also had a difficult relationship with the country’s media. Under her government, the Congress approved a new media law that critics say restricts freedom press.
She also introduced tighter regulations for Argentines attempting to buy foreign currency.
In her interview with state television, Cristina Fernandez de Kirchner said the measure was necessary.
“As president I look after the interests of 40 million Argentines. So, as I don’t print dollars, I need dollars to pay the debt I haven’t created.”
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US car sales jump to near six-year high in August as consumers grew more confident about an economic recovery.
Sales jumped 17% from a year ago to 1.5 million vehicles. That translates to sales of some 16 million a year.
Japan’s carmakers Toyota, Honda and Nissan all increased sales by more than 20%. The US’s Ford, General Motors and Chrysler also saw double-digit growth.
US economic growth has been picking up pace indicating the world’s largest economy may be getting back on track.
Revised figures released last month showed that the US economy grew at an annualized pace of 2.5% in the second quarter of the year – more than double the pace recorded in the previous three months
Mustafa Mohatarem, chief economist at General Motors, said the robust sales pace “reflects the underlying fundamentals of the economy”.
US car sales jump to near six-year high in August as consumers grew more confident about an economic recovery
The US is the world’s second-biggest car market. However, the sector suffered i the years following the 2008 – 09 global financial crisis.
The crisis resulted in a sharp slowdown in the US economy and a rise in unemployment levels in the country.
Those factors dented consumer confidence and saw them cut back on their spending.
But the US economy has now been showing signs of a sustained recovery.
The jobless rate has been going down, while other key indicators such as manufacturing and property prices have been picking up.
Industry players said that had helped boost confidence among consumers.
They added that the sales were also being boosted by the fact that people need to replace ageing cars after putting off purchases in recent years in the wake of the crisis.
“People are just tired of waiting,” said Fred Diaz, US sales chief for Nissan.
“They need new transportation, and they’re feeling confident about the jobs and secure about their careers.”
The average age of vehicles in the US is currently at a record 11 years.
The US economy grew at an annualized pace of 2.5% in Q2 2013, the Commerce Department said in revised figures.
That was more than double the pace recorded in the previous three months, and above estimates of 2.2%.
The rise, helped by an increase in exports, is a further sign that the economy may be getting back on track.
The government had originally estimated that GDP grew at a 1.7% rate in the second quarter.
The US economy grew at an annualized pace of 2.5 percent in Q2 2013
The revised non-annualized quarter on quarter figure was 0.6%, up from an initial 0.4% estimate.
Housing and business investment, two key sectors of the economy, remained strong in the revised figures.
Housing construction grew at an annual rate of 12.9%, the fourth consecutive quarter of double-digit growth.
Meanwhile, business investment was revised up to a 16.1% rate.
The government also said data from retailers showed they had restocked their shelves at a faster pace in the April-to-June period than first thought.
The positive news could make US central bank economists more likely to begin reducing monthly bond purchases later this year.
The programme is one of the US’s last stimulus measures.
Economists think growth will stay at the 2.5% rate in the second half of the year, boosted by steady job gains and less drag from federal spending cuts.
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IMF has cuts its economic growth forecast for China, with weakness in the global economy set to hit exports.
The International Monetary Fund it now expected the world’s second largest economy to grow by “around 7.75%” this year, and at about the same pace in 2014.
That is lower than the 8% forecast for 2013 the IMF made in its World Economic Outlook, published last month.
The IMF also called for a “decisive impetus to reforms” in the country.
Last year, China’s economy grew by 7.8%, its slowest rate for 13 years. In the first three months of this year, it expanded at a lower-than-expected annual pace of 7.7%.
Last week, the release of disappointing Chinese manufacturing figures was one of the factors behind a global sell-off in shares. A survey indicated that factory activity had contracted for the first time in seven months in May.
Speaking to reporters in Beijing, IMF first deputy managing director David Lipton said: “The Chinese economy is expected to grow at around 7.75% this year and at about the same pace next year.
“Chinese export growth has been, after years and years of very rapid growth, very slow because of the state of the global economy and we now are taking our projections of the global economy into effect.”
IMF has cuts its economic growth forecast for China, with weakness in the global economy set to hit exports
Among the measures called for by the IMF are slower growth in social financing and a relaxation of controls on interest rates and the exchange rate.
Despite the cut in the IMF’s forecast, David Lipton noted: “Let’s not lose sight of the fact that China is still growing at a very fast rate.
“We’re projecting that growth will remain robust.”
David Lipton added that growth “should pick up moderately in the course of the second half of this year, as the recent credit expansion gains traction and in line with a mild pick-up in the global economy”.
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South Korea is the latest Asian country to try and boost economic growth by spending hard, unveiling a 17.3 trillion won ($15.3 billion) stimulus plan.
The funds will be used to help small and medium-sized exporters, create jobs, boost a stagnant property market and cover a shortfall in tax revenue.
Recently, South Korea has been hurt by weak exports and subdued domestic demand.
The move is expected to help boost annual growth by 0.3 percentage point this year and create 40,000 jobs.
“This is a much-needed move,” said Kwon Young-sun, an economist with Nomura.
“It may not boost growth substantially but will help sustain the economy in the medium term amid the various pressures and challenges that it is facing.”
South Korea is the latest Asian country to try and boost economic growth by spending hard, unveiling a 17.3 trillion won stimulus plan
The move comes just weeks after the finance ministry cut the country’s growth forecast for the current year.
It said it expects the economy to grow by 2.3% in 2013, down from its earlier projection of 3%.
The biggest drag on growth has been a slowdown in exports, which account for almost half of South Korea’s total economic output. Shipments have been hit by weak demand in markets such as the US and the eurozone.
At the same time, recent fluctuations in currency markets have triggered concerns over a further slowdown in the sector.
The South Korean won has risen by nearly 10% against the US dollar since May, making its exports more expensive to foreign buyers.
A strong currency also hurts the profits of exporters when they repatriate their foreign earnings back home.
The main trigger for the gain in the won has been Japan’s decision to massively boost its stimulus and spending plans. At the centre of its new policy has been achieving a weaker yen in the hope of boosting exports.
Japan’s yen has dipped nearly 20% against the US dollar since November last year.
There are fears that because Japan and South Korea compete in similar markets, Korean goods may lose out as a result of the currency moves.
The Chinese economy, world’s second-largest, has slowed and performed worse than many analysts expected in the first quarter of 2013.
Annual growth was 7.7% in Q1 2013, compared with 7.9% in Q4 2012. Analysts had forecast a figure closer to 8%.
China wants to spur growth after it hit a 13-year low in 2012.
Other key data on Monday also came in lower than market expectations, raising questions over the outlook for growth.
Industrial output rose 8.9% in March from a year earlier, much lower than analysts’ targets of 10%.
Meanwhile, fixed asset investment, a key driver of China’s growth, rose at an annual rate 20.9% in the first three months of year. Analysts had expected growth of more than 21%.
The Chinese economy, world’s second-largest, has slowed and performed worse than many analysts expected in the first quarter of 2013
“The Chinese economy is showing soft growth momentum in the first quarter,” said Wei Yao of Societe Generale.
“All these figures showed that the economy is in a weak recovery.”
Over the past few years, China has relied heavily on its exports and investment spending to maintain a strong pace of growth.
However, as economic growth in its key markets such as the US and Europe has slowed, and its exports have weakened, there have been calls for China to rebalance its economy.
Beijing has acknowledged this and has indicated that it wants to increase domestic demand to reduce its dependence on exports and achieve more sustainable growth.
At the same time, China has had to deal with a widening wealth gap, which has prompted fears of social unrest in the country.
There have been calls for the new leadership, which took charge in March, to work towards a more inclusive growth model.
Analysts said a slower rate of growth may actually help China, as it tries to achieve those goals.
“Given Beijing’s goal of restructuring the economy, a relatively moderate economic growth is not a bad thing in the longer term,” said Wei Yao of Societe Generale.
She added that this “could help policymakers focus more on the quality rather than speed of the economy”.
China has taken various steps over the past few months to spur growth.
China’s central bank has cut interest rates twice since June to reduce borrowing costs for businesses and consumers and increase lending.
Beijing has also approved infrastructure projects worth more than $150 billion.
Analysts said China was likely to continue to use easy monetary policies as a tool to sustain growth, and would not raise rates or look to limit access to capital.
“Certainly with this number, policy certainly would not tighten and would continue to be quite accommodative,” said Tao Wang, an economist with UBS.
However, some analysts warned against any further aggressive easing measures, adding that such measures may promote asset bubbles and overheat the economy.
“Another year of propped-up growth via state spending and a credit deluge would, we fear, push China dangerously close to proving Wen Jiabao correct – that the current economic model is <<unsustainable>>,” said Alistair Thronton, senior China economist at IHS Global Insight.
“If something is unsustainable, at some point, it won’t be sustained.”
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Eurozone unemployment rate hit to a new high of 18.49 million in September, the EU statistics agency has said.
The number of people out of work rose by 146,000, pushing the unemployment rate up to 11.6%. This compares with 10.3% a year earlier.
The highest unemployment rate was recorded in Spain, where 25.8% of the workforce is out of a job, and the lowest of 4.4% was recorded in Austria.
In Spain and Greece, more than half the workforce aged under 25 has no job.
The lowest youth unemployment rate of 8% was recorded in Germany, where 5.4% of the overall workforce is out of work.
The eurozone as a whole is struggling to generate the economic growth needed to stimulate employment. Its economy shrank by 0.2% between April and June, with Italy and Spain stuck in recession and France registering no growth for the past three quarters.
The notable exception is the German economy, Europe’s biggest, which grew by 0.3% in the second quarter.
Growth there is expected to slow when preliminary figures for eurozone GDP between August and October will be published on 15 November.
Across the wider 27-nation European Union, unemployment rose by 169,000 to 25.75 million people, Eurostat said, with the unemployment rate rising slightly to 10.6%.
September unemployment rates
• Spain: 25.8%
• Portugal: 15.7%
• Italy: 10.8%
• France: 10.8%
• Germany: 5.4%
• Eurozone: 11.6%
• US: 7.8%
• Japan: 4.2%
Source: Eurostat
Chinese economy has slowed for a seventh quarter as problems in Europe and the US hurt demand for its goods.
The annual rate of growth was 7.4% in the third quarter, down from 7.6% in the previous three months.
However, there were signs that the world’s second-biggest economy was now stabilizing and rebounding.
That would be good news for China, which is facing a leadership change, and the rest of the world, which has benefited from its recent boom.
“Clearly, concerns over continued slowdown can now be put to rest,” said Dariusz Kowalczyk, senior economist as Credit Agricole-CIB.
“The last month of the quarter brought acceleration of industrial output, retail sales and fixed asset investment in year-on-year terms, highlighting the fact that improvement of momentum of the economy was particularly strong in September.”
In Hong Kong, the main Hang Seng stock index rose 0.7% on the news, while in Shanghai, shares climbed by 1.2%.
China’s growth over the past few years has been led by the success of its export and manufacturing sector, as well as by a credit-fuelled investment boom directed by the government.
But a number of issues have recently hurt demand for China’s exports, not least the debt crisis in the eurozone and a sluggish rebound in the US.
This had increased worries that China’s economic growth would slow further in coming months, and may even dip below the 7% mark, leading to a longer economic slump both inside and outside of the country.
That is something that China was keen to avoid as it prepares for a once-in-a-decade leadership change. China’s ruling communist party is about to unveil its next generation of leaders in November.
The fears had been that a sharp slowdown in the economy may result in business cutting jobs, leading to higher unemployment.
There had also been concerns that a significant slowdown may prompt a big drop in property prices – eroding the value of assets of many people.
However, on Thursday, China also released other key economic indicators alongside its gross domestic product (GDP) data, and these indicated that things may be starting to pick up again.
China’s industrial production rose by a more-than-expected 9.2% in September from a year earlier. That was up from 8.9% growth in August.
Retail sales, meanwhile, during the same month were 14.2% higher than a year earlier, signalling that domestic consumption was growing.
“The September data indicates economic momentum has picked up strongly compared with July and August,” said Zhang Zhiwei, chief China economist at Nomura in Hong Kong.
The latest numbers added to the optimism that followed trade figures which were released over the weekend. They showed a 9.9% year-on-year growth in exports during September, a big jump from the 2.7% growth recorded in the previous month.
Zhang Zhiwei added the latest data “helps reinforce our view that growth will rebound visibly in the fourth quarter”.
China has announced various stimulus measures in recent months aimed at boosting domestic consumption and sustaining growth.
The central bank has lowered the amount of money that banks need to keep in reserve three times in the past few months in order to increase bank lending.
It has cut interest rates twice since June to reduce the burden on businesses and other borrowers.
Beijing has also approved infrastructure projects worth more than $150 billion, aimed at spurring a fresh wave of economic development.
There had been hopes that China’s policymakers may take further measures to spur growth. But with September’s positive set of economic data analysts say they may now see Beijing delay a major move.
“There is no room, or need, for any further major stimulus, especially a rate cut,” said Dariusz Kowalczyk of Credit Agricole-CIB.
Even so, other analysts reckon that any rebound is in its early stages and if anything, it needs a further boost to take hold and continue.
The worry is that should China stop helping consumers and businesses, then growth could stagnate or start to retreat again.
