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* Germany and Spain eke out narrow Q4 growth
* France contracts by less than expected
* But vaccine roll-out issues, restrictions blight outlook
* IMF sees euro zone recovery lagging U.S., Japan
By Paul Carrel and Leigh Thomas
BERLIN/PARIS, Jan 29 (Reuters) - Growth in Germany and Spain
and a smaller-than-expected contraction in France pointed to
resilience in the euro zone economy in the final three months of
last year, but the bright spot belies a more troubled outlook
for the bloc.
In Germany, robust exports helped Europe's largest economy
eke out 0.1% growth in the fourth quarter, staving off
contraction despite a second wave of the new coronavirus
slamming the brakes on consumption, data showed on Friday.
France, the euro zone's second-largest economy, shrank 1.3%
in the final three months of 2020 after the country entered a
second coronavirus lockdown in October to contain a second wave
of infections.
Spain achieved timid quarterly growth of 0.4%. But that has
not stopped Spain from recording its worst-ever annual economic
contraction, with output falling 11% from 2019's level, official
data showed.
"Numbers for Germany, France and Spain showed that GDP was
relatively resilient in Q4," Nicola Nobile at Oxford Economics
wrote in a research note. But he added, "there are not many
indications that this dynamic could have continued in Q1."
"All in all, the disappointing vaccine roll-out so far, the
extension of restrictions in many European countries and the
latest data now point to continued weakness in the eurozone over
the coming months."
The French slump, which followed an 18.5% rebound in the
third quarter after a first lockdown, beat expectations for a 4%
contraction on average in a Reuters poll of 28 economists,
surpassing even the highest estimate of -1.4%.
But France is on tenterhooks to find out in the coming days
whether the government will put the country under a new lockdown
and in particular whether schools will be closed.
In Germany, Chancellor Angela Merkel and state leaders
agreed last week to extend a lockdown until mid-February as the
country, once a role model for fighting the pandemic, struggles
with a second wave and record daily numbers of COVID-19 deaths.
On Wednesday, German government slashed its growth forecast
to 3% this year, a sharp revision from last autumn's estimate of
4.4%, caused by a second coronavirus lockdown.
TRAILING U.S.
The economic outlook across the 19-country euro zone is
being muddied by a row between the European Union and
Anglo-Swedish firm AstraZeneca over its supply of
vaccines to the bloc, and by the return of inflation in Germany.
The International Monetary Fund said this week the euro area
is likely to slip behind the United States in its recovery.
"Recovery paths vary within the group, with the U.S. and
Japan projected to regain end-2019 activity levels in the second
half of 2021, while in the euro area and the United Kingdom
activity is expected to remain below end-2019 levels into 2022,"
the IMF said in its in its World Economic Outlook.
The AstraZeneca supply issue is a blow to Europe's COVID-19
vaccination drive, and the German inflation spike - consumer
prices turned positive and rose in January to 1.6% on the year -
adds to a complex mix of data for the European Central Bank to
assess.
ECB data released on Friday showed lending to euro zone
companies picked up last month though the bloc was probably back
in recession and banks said they were tightening access to
credit amid fear of defaults amid a fresh wave of lockdowns.
The ECB is unlikely to cut its already-record-low policy
because that would do little to revive the pandemic-hit euro
zone economy, five sources told Reuters, playing down concern
about a strong euro.
Traders were left scratching their head this week when Dutch
central bank governor Klaas Knot said the ECB "had room" to push
its Deposit Facility Rate, currently at minus 0.5%, further
below zero if needed to stem a rally in the euro EUR=.
The sources said Knot had raised the rate cut issue at the
ECB's policy meeting last week but the discussion was "marginal"
and not considered part of the ECB's policy strategy, which is
now focussed on bond purchases and cheap loans to banks.
"ECB communication could be such a powerful tool but is
really very confusing," BofA analysts said in a research note.
(Additional reporting by Belén Carreño and Joao Manuel Vicente
Mauricio in Madrid and by Francesco Canepa, Balazs Koranyi and
Frank Siebelt in Frankfurt; editing by Larry King)
