BRUSSELS, (Reuters) – The Euro zone’s economic growth slowed significantly quarter-on-quarter in the third month of 2021 as was expected, according to data on Tuesday. This is due to activity being hit again by COVID-19 infections, surging prices, and a reduction in disposable incomes.

Eurostat, the European Union’s statistic office confirmed earlier estimates that GDP in 19 Euro-Spain countries increased 0.3% quarter-onquarter during the October-December period. This equates to a 4.6% increase year-on–year.

According to Reuters polled economists, eurozone employment increased 0.5% quarter on quarter for 2.1% annual growth.

Eurostat data revealed that the rise in energy prices had a major impact on the euro area’s trade balance, causing it to experience a trade deficit of 4.6billion euros in December. This is a drastic change from its surplus of 28.3billion in 2012. Exports increased by 14.1% and imports went up 36.7%.

After being adjusted for seasonal fluctuations, the Euro zone trade deficit reached 9.7 billion euro in December. This was up from the November gap of 1.8 billion and the surpluses that remained throughout 2021.

The higher cost of energy led to an increase in the European Union’s deficit in energy trade. It reached 276.7 billion euro in 2021 from 157.2 billion in 2020.

Europe’s trade deficit with Russia was more than four times larger last year, at 69.2 Billion euros. This is a significant increase from the 15.7 Billion in 2020. From a surplus of 6.1 billion in 2020, the trade deficit with Norway, another major EU supplier, jumped to an 18 billion level.