Euro zone's plucky Q4 belies troubled outlook

Growth in Germany and Spain, as well as a smaller-than-expected contraction in France pointed to resilience in the euro zone economy in the final three months of last year.

Germany's robust exports helped Europe's largest economy eke out 0.1% growth.

Data showed on Friday (January 29) it staved off contraction despite a second wave of the new strain of the virus slamming the brakes on consumption.

France, the euro zone's second-largest economy, shrank 1.3% in the final three months of last year.

While Spain achieved a timid quarterly growth of 0.4%.

But that has not stopped the country from recording its worst-ever annual economic contraction, with output falling 11%.

One economist said "numbers for Germany, France and Spain showed that GDP was relatively resilient in Q4".

But added that "there are not many indications that this dynamic could have continued in Q1".

Virus cases remain high across the region.

And France is on tenterhooks to find out in the coming days whether the government will put the country under a new lockdown.

Germany's leaders agreed last week to extend its restrictions until mid-February.

The government has slashed its growth forecast to 3% this year.

The International Monetary Fund said this week that the euro area is likely to slip behind the United States in its recovery.