Three of the euro area’s four largest economies rounded off the pandemic year suggesting the region can avoid a deeper recession, while still facing headwinds from extended coronavirus lockdowns. Gross domestic product in Spain unexpectedly increased 0.4%, defying expectations for a 1.4% drop. In another surprise, Germany also recorded growth, while output in France fell less-than-forecast after consumer spending rebounded sharply in December.

While the data signal businesses have found ways to cope with restrictions, the outlook remains gloomy. The spread of more infectious virus strains and a slow and chaotic vaccination rollout in the European Union raises the risk of longer curbs and a greater need for stimulus.

European Central Bank President Christine Lagarde has already promised to bolster support if needed. For now though, Governing Council member Gabriel Makhlouf said there’s no need to cut interest rates.

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