France, Paris, the Avenue of the Grande Armee linking La Defense. Photo: AFP

The eurozone economy grew at its slowest quarterly pace since 2016, missing modest forecasts, to rise 0.3%, according to official data released on Tuesday.

Economists polled by Reuters expected the number to hold at 0.4%.

The official figures are just an estimate without details of the composition of growth.

Higher oil prices have contributed to the slowdown, but the threat of raising trade barriers coming from the Trump administration was also a big factor, per The Financial Times.

It is unclear whether the slowdown will knock the European Central Bank off of its current path of very gradual normalization, but the development decreases the likelihood of rate hikes any time soon.

“In all, we doubt that the ECB will be deterred from its course of gradual policy normalization yet,” Jennifer McKeown, chief European economist at Capital Economics, was quoted as saying. “But interest rates seem unlikely to rise until September 2019 at the earliest and the bank will keep open the option of extending its asset purchases into next year should the slowdown continue.”

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