Eurozone "astonishes" with 0.6-per-cent GDP growth in first quarter

The eurozone's gross domestic product (GDP) posted quarterly growth of 0.6 per cent in the first three months of the year, official data showed Friday, a better-than-expected result for the world's third-largest economic bloc.

The figures from Eurostat, the European Union's statistics office, indicated that, despite adverse global circumstances, euro area output was expanding at double the pace from the previous two quarters, when GDP rose by only 0.3 per cent.

Even with growth slowdown concerns for the US, China and several emerging markets, and weak confidence among its consumers and businesses, the "eurozone economy astonishes in the first quarter," ING bank senior economist Bert Colijn wrote in a note to clients.

"The numbers provide a solid start to the year, particularly against a background of worries over the global economy," Jonathan Loynes of the Capital Economics research group said in another note. But he said it was too early to speak of "a solid and sustained recovery."

On a yearly basis, GDP in the 19-member currency union expanded by 1.6 per cent, Eurostat said.

Economists had predicted quarterly growth of 0.4 per cent and annual growth of 1.5 per cent, according to data from the Financial Times' economic calendar.

Across the whole of the EU, GDP rose by 0.5 per cent compared to the previous quarter, and by 1.7 per cent year-on-year, Eurostat said.

It was the first time that Eurostat published growth data 30 days from the end of the reference quarter, rather than the usual 45. No country-by-country breakdown was provided, due to come in two weeks' time.

National data came from France, where quarter-on-quarter growth in early 2016 was 0.5 per cent rather than the expected 0.4 per cent, and Spain, where the rise was 0.8 per cent, one tenth of a percentage point more than forecast.

Europe was badly affected by the recession-inducing 2008 global financial crash and later debt crises in countries such as Greece, Ireland and Spain, and has lagged behind the United States in terms of economic recovery.

Last update: Fri, 24/06/2016 - 08:49
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