slow growth in the fourth quarter of 2007

Economic growth in the euro zone slowed in the last quarter of 2007 as a result of the decline in the consumption of households and public spending.

The gross domestic product in the euro zone over the last three months to the end of December is still 0.4% higher than the third quarter, and 2.2% higher than the last quarter of 2006, according to statistics released Tuesday by Eurostat.

The rate of growth in the euro zone yoy has been adjusted downward compared to the first Eurostat estimate, which stood at 2.3%. The growth rate from the previous quarter meanwhile remains the same as the initial estimate.

Eurostat also reduced its estimates of GDP growth in the third quarter, to 0.7% from the previous quarter and 2.6% over the year, against 0.8% and 2.7% previously.

The slowdown in the fourth quarter was mainly due to the decline in consumer spending, which fell 0.1% during that period, compared with an increase of 0.5% over the three months to the end of September. Public expenditures have also decreased by 0.1%, while the growth of investment spending has fallen to 0.8%, compared with 1.2% in the third quarter.

In 2007, the euro area economy grew by 2.6%, a slight slowdown compared with the 2.8% recorded in 2006. The American economy grew by 2.2% last year, while Japan's economy grew by 2.1%.

The slowdown in demand in the euro area probably reflects the tightening of credit and a decline in confidence, households and businesses concerned about the consequences for the economies of turbulence on the financial markets towards the end of the third quarter