Eurozone recovery falters as Greece slips back into recession

Italy slows to near stagnation as eurozone GDP expands just 0.3% in final quarter despite ECB stimulus and cheap oil

The eurozone recovery remains disappointingly weak after Greece fell back into recession and Italy slowed to near stagnation.

The single currency area grew by just 0.3% in the final quarter of 2015, statistics body Eurostat reported on Friday.

Greek Q4 GDP contracts 0.6 pct QoQ, recession of 0.7 pct in 2015 https://t.co/vopG1HUAOG #Greece #economy #euro pic.twitter.com/mkw2DWmHbc

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The slowdown in emerging markets, particularly China, has dampened external demand for German products. The upside should come from the weaker euro, which should partially mitigate soft external demand

"In particular, any slowdown of the US economy could turn out to be a double whammy for Germany."

0.4% => 0.3% => 0.2% => 0.1%...
(Q1) (Q2) (Q3) (Q4)#Italy's QoQ GDP growth in 2015 not looking particularly auspicious.

Ouch. Italy real GDP growth up by just 0.1% qoq in the final quarter of last year.

We currently pencil in GDP growth of 0.3% q/q for Q1. The big question is how much the turmoil on financial markets will weigh on growth. The wealth effect may not be very strong in the euro area, but it is still negative.

"Moreover, the euro is about to strengthen which dampens both exports and inflation. On top of that, problems in the banking sectors might mean that bank lending soon will decline before long."

Euro area #GDP in Q4 okay but that is the look in the rear mirror. Big risks ahead https://t.co/lV9rkguwbd pic.twitter.com/QLLx8BjRAQ

We have been expecting eurozone GDP growth to improve modestly to 1.7% in 2016, but this is currently looking ever more questionable and may well need to be revised down.

"There are clearly mounting downside risks to the eurozone growth outlook coming from global growth problems and financial market weakness and volatility."