GDP growth fell to 1.3% in the eurozone and by 1.6% in the EU25 in 2005

European
GDP growth fell to 1.3% in the eurozone and by 1.6% in the EU25 in 2005
By Finfacts Team
Mar 3, 2006, 11:19

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Both eurozone¹ and EU25 GDP grew by 0.3% in the fourth quarter of 2005, compared to the previous quarter, according to first estimates released by Eurostat, the Statistical Office of the EU. In the third quarter of 2005, growth rates were +0.7% in both zones.

Compared to the fourth quarter of 2004, GDP rose by 1.7% in the euro-zone and by 1.8% in the EU25, after +1.6% and +1.8% respectively in the previous quarter.

Private consumption weak, investments and external trade slowing down

During the fourth quarter of 2005, household² final consumption expenditure fell by 0.2% in the euro-zone and remained stable in the EU25 (after +0.5% and +0.6% in the third quarter 2005). Investments grew by 0.8% in the eurozone and by 0.6% in the EU25 (after +1.1% and +1.5%). Exports rose by 0.5% in the euro-zone and by 0.6% in the EU25 (after +3.4% and +3.0%). Imports increased by 0.9% in the euro-zone and by 0.8% in the EU25 (after +3.1% and +2.9%).

US GDP up by 0.4%, Japanese GDP up by 1.4%

In the United States, GDP increased by 0.4% during the fourth quarter of 2005, after +1.0% in the third quarter. In Japan GDP grew by 1.4% in the fourth quarter of 2005, after +0.3% in the previous quarter.

Compared to the fourth quarter of 2004, GDP rose by 3.2% in the US (after +3.6% in the previous quarter) and by 4.5% in Japan (after +2.8%).

GDP grew by 1.3% in the eurozone and by 1.6% in the EU25 in 2005

Over the whole year 2005³, GDP grew by 1.3% in the eurozone and by 1.6% in the EU25, compared to +2.1% and +2.4% respectively for 2004.

Over the whole year 2005, GDP grew by 3.5% in the US (+4.2% in 2004) and by 2.8% in Japan (+2.3% in 2004).

Euro-zone: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland.
NPISH (Non-profit institutions serving households) included.
Annual data are not adjusted for working-day effects. The working-day effect for 2005 when compared to 2004 is estimated to account for -0.1 percentage points of GDP growth in the euro-zone and slightly less than -0.1 percentage points for the EU25. Therefore, the annual growth for 2005 adjusted for working-day effects is +1.4% for the euro-zone and +1.6% for the EU25.

Methodological Changes: EU Member States are currently adapting their national accounts to comply with methodological improvements agreed upon internationally. One important change is the allocation of “financial intermediation services indirectly measured” (FISIM) to user sectors, another one is the change of volume measures from a fixed-year price base to chain-linking data at previous year’s prices. These two improvements may be introduced together or separately, and they are often combined with a major revision of data sources, which in itself can lead to substantial revisions of previously published data. By now, most Member States of the EU have applied the changes in their national accounts. Both methodological changes have been introduced into the accounts for the euro-zone and the EU25 starting with the first regular release for 2005Q3 published 30 November 2005. The new methods are also introduced into the annual accounts for the euro-zone and the EU25.

Summary quality information:

European quarterly national accounts are compiled in accordance with the European System of Accounts 1995 (ESA95). The first estimates of 2005 Q4 GDP growth presented in this release are based on Member States’ data as available, covering 78% of euro-zone GDP (78% of EU25 GDP). These data are seasonally adjusted according to national adjustment procedures. They are also corrected for working days for Belgium, Germany, Spain, France, Italy, Hungary, the Netherlands, Austria, Slovenia, Finland, Sweden and the United Kingdom. Seasonally adjusted European aggregates are calculated from seasonally adjusted Member States’ data (indirect seasonal adjustment).

A flash estimation of GDP growth was published in News Release 18/2006 issued on 14 February 2006. This was based on a more limited data set than the one used for the present News Release and, additionally, on flash estimates for some Member States, which have now been revised. The extent of these revisions is, nevertheless, small. The published growth rates for the fourth quarter 2005 compared to the previous quarter remain unchanged at +0.3% for the euro zone and is revised from +0.4% to +0.3% for the EU25 in the present release. Compared to the fourth quarter 2004, GDP growth that had been estimated at +1.7% in the euro-zone and +1.8% in the EU25, remains unchanged.

With the first regular estimates, euro-zone and EU25 figures are subject to revision for all variables and all quarters. Figures presented in this release may be further revised with the second regular estimate, scheduled for 12 April 2006.

More data on European quarterly national accounts are available on Eurostat’s website (“Data” / “Economy and Finance” / “National Accounts”). Also there, additional general information on European national accounts is given in the metadata files linked to the data tables.