1st LD Writethru: Eurozone economy expands 0.5 pct in Q4: estimate

Gross domestic product (GDP) of the 19-country eurozone grew 0.5 percent in the last quarter, Eurostat projected on Tuesday.

The figure, which was nudged up from the 0.3 percent in the third quarter, could be well received in Brussels as European policy makers have been long cautioned about the bloc's subdued growth as well as unexpected downturns stirred by Brexit.

Eurozone's powerhouse Germany saw quarterly growth of 0.5 percent between October and December while France, the second largest economy in the single currency zone, surprised the market with 0.4 percent, twice as fast as in the second quarter.

In a separate report, annual inflation in the Eurozone was expected to be 1.8 percent in January, up from 1.1 percent in December 2016, said Eurostat, the bloc's statistics agency.

The Eurozone GDP ended 2016 on a positive note and inflation rose sharply in January, said Jennifer McKeown, chief European Economist at Capital Economics.

The growth marked an acceleration from the third quarter and left the year-on-year growth rate at a healthy 1.8 percent, McKeown said, adding that inflation increase was mainly driven by energy price hiking.

Tuesday's figures would give the European police makers food for thought, but the bloc's central bank is still expected to maintain massive stimulus measures in a bid to bolster the bloc's growth and reach inflation goal of "close but below 2 percent," said McKeown. Endi