European Union economies bouncing back from crisis

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Growth slowed in Germany and Italy, while the pace of expansion accelerated in the Netherlands and Portugal, according to separate reports.

The slight slowdown from the 0.7 per cent expansion in the third quarter was less than previously thought, with 0.59 quarter-on-quarter growth, above the 0.56 per cent previously thought. It was the best performance since 2007, the year the global financial crisis began to unfold. Momentum in the country at the end of past year was driven by a strong increase in exports, according to a national report. General government final consumption expenditure increased, whereas household final consumption expenditure remained roughly at the previous quarter's level. GDP is seen expanding 0.6%, in line with flash estimate.

Q4 growth in Germany was 0.6%, France expanded 0.6% and Spain grew 0.7%. GDP increased 0.7 percent in Portugal.

Only in the last quarter of previous year both the European Union and the eurozone have grown by 0.6 percent on a quarterly basis.

He said: "Looking ahead, the same fundamentals which have supported growth in 2016 and 2017 should still be in place in 2018".

"The acceleration of production growth is unlikely to be a one-off as the outlook for industry remains rosy", said Bert Colijn, senior euro zone economist at ING bank.

While ECB President Mario Draghi has welcomed the region's strengthening momentum, he also cautioned against removing stimulus too quickly in light of still-muted inflation.

The production surge was fuelled by durable consumer goods such as refrigerators and TV sets, the output of which jumped 2.7 percent on the month in December and was 7.4 percent higher than a year earlier. The bank is expected to keep its rate unchanged at -0.50%.

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