Paris and Tokyo - Economic growth accelerated in Japan and lost half of its previous speed in Europe over the last three months of last year, when the US economy came close to standstill, official data showed yesterday.
That gave Europe the best growth rate for 2007, followed by the US, even if Japan finished the strongest out of three major industrialised regions that now have to confront the spectre of US stagnation or recession.
Japan's gross domestic product (GDP) grew 0.9 percent in the December quarter, twice what economists had forecast and three times as much as the previous quarter, leaving GDP growth for the year as a whole at 2.1 percent, versus 2.4 percent in 2006.
The spurt late last year, which analysts said might be a lot better than what was coming next, was driven mostly by corporate investment and exports, primarily of cars and software.
It put Japan's growth last year one-tenth of a percentage point behind the US, where GDP is estimated at 2.2 percent, with the difference that Japan put in a sprint finish.
US fourth-quarter growth was announced at 0.6 percent by the US commerce department.
That actually translates to about 0.15 percent quarter on quarter, when divided by four, to make it comparable with the Japanese and European figures.
In Europe, GDP growth for the fourth quarter dropped to 0.4 percent in the euro zone from 0.8 percent in the third quarter, while the rate dropped to 0.5 percent from 0.8 percent for the wider 27-nation EU, which includes Britain, Sweden and many of the formerly Communist countries of eastern Europe, according to EU statistics office Eurostat.
In Europe, growth in the largest economy, Germany, slowed to 0.3 percent compared with the third quarter, when it was 0.7 percent.
French GDP growth also slowed to 0.3 percent, from 0.8 percent in the third quarter.
Germany's economy grew 2.5 percent last year, short of the 2.9 percent it scored in 2006, a bumper year for the world's top exporting nation, while French GDP growth for last year slipped to 1.9 percent from 2.2 percent in 2006, short of the government's target.
"Euro zone growth is in trouble," said David Brown, the chief European economist at Bear Stearns International.
"Germany and France have suffered a major loss of forward momentum ... Investment growth and exports may be giving growth some short-term respite, but this will not last for long if domestic demand begins to fade in a bigger way and the prospect of global slowdown begins to loom larger."
Germany and France account for more than 50 percent of the total GDP of the 15-country euro currency zone.
Spain, which economists fear is heading for a hiding as a housing and construction boom ends, fared relatively well in the fourth quarter with GDP growth of 0.8 percent, after 0.7 percent in the third quarter.
As always, financial markets are more focused on what is about to happen rather than on GDP estimates that see the light of day a month or two after the period concerned.
Regarding Japan, some analysts took the good fourth-quarter GDP data as a sign that the export-driven economy had less to fear from weaker US demand than others, but that did not prevent from others viewing the future negatively.
"If Japanese industrial production falls as expected in January February, the Japanese economy will surely fall into a recession," said Naoki Murakami, an economist at Goldman Sachs.
Others said recession fears were overblown. "Today's data showed the Japanese economy grew even as the US economy slowed down," said Mitsuru Saito, the chief economist at Tokai Tokyo Securities.
"The US economy may stagnate this year but that is unlikely to have much additional impact on Japan."
Japanese exports have so far held up despite the US slowdown, thanks to strong demand from elsewhere in Asia and other emerging economies - the data showed that net exports accounted for almost half of fourth-quarter growth.
In Europe, the weaker fourth-quarter performance was expected. Germany's statistics office provides details only in a few days' time but summarised things as follows: "Growth in the fourth quarter was powered by a further strong increase in equipment investment and by net trade. There were negative impulses from consumption, characterised by falling household spending."
In France, the biggest drag on GDP was companies running down inventories.
By contrast with the long-industrialised economies, growth in Chinese GDP was officially reported at 11.2 percent in the last quarter of last year and at 11.4 percent for the year as a whole.