Consumer spending recovery in euro area likely slowing down

The first estimate for euro area's Q4 GDP growth of 0.3% is unlikely to have been changed. The main focus in the release of the second estimate is expected to the breakdown of GDP by expenditure component. This is expected to indicate that consumer spending rebound seen in 2015, which was the main growth driver, is beginning to decelerate. Retail sales in Q4 were broadly flat.

This suggests growth in overall consumer spending slowed down. This view is supported by the breakdown of GDP given by certain national statistics offices. Those breakdowns also imply that net trade in Q4 slowed as the earlier beneficial impact of euro's depreciation began to wear off. Meanwhile, investment and government spending rose. In all, the main growth drivers of 2015 are already beginning to fade.