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Eurozone beats growth expectations Eurozone beats growth expectations
(35 minutes later)
The eurozone’s reputation as the laggard of the global economy appeared to be overly pessimistic, after revised figures showed annual GDP growth in the currency bloc edged higher to 1.7%.The eurozone’s reputation as the laggard of the global economy appeared to be overly pessimistic, after revised figures showed annual GDP growth in the currency bloc edged higher to 1.7%.
Eurostat, the official data agency for the European Union, showed that GDP growth in the first quarter was 0.6%, after being trimmed to 0.5% in an earlier estimate, pushing the annual growth rate up from the previous estimate of 1.6%.Eurostat, the official data agency for the European Union, showed that GDP growth in the first quarter was 0.6%, after being trimmed to 0.5% in an earlier estimate, pushing the annual growth rate up from the previous estimate of 1.6%.
Growth in the fourth quarter of 2015 was also revised up to 0.4% quarter-on-quarter from 0.3%.Growth in the fourth quarter of 2015 was also revised up to 0.4% quarter-on-quarter from 0.3%.
Eurostat pointed out that an increase in investment was among the biggest factors in the boost to GDP across the eurozone along with a rise in exports of 0.4%, though the eurozone’s healthy trade balance was slightly eroded by a rise in imports of 0.7%. It added that the US economy expanded by just 0.2% in the first quarter.Eurostat pointed out that an increase in investment was among the biggest factors in the boost to GDP across the eurozone along with a rise in exports of 0.4%, though the eurozone’s healthy trade balance was slightly eroded by a rise in imports of 0.7%. It added that the US economy expanded by just 0.2% in the first quarter.
Campaigners for the UK to remain in the EU are likely to welcome the figures, which show the rise in eurozone growth and the 0.5% average rise in GDP for the 28 countries of the EU outstripping the UK’s 0.4% growth rate in the first three months of the years.Campaigners for the UK to remain in the EU are likely to welcome the figures, which show the rise in eurozone growth and the 0.5% average rise in GDP for the 28 countries of the EU outstripping the UK’s 0.4% growth rate in the first three months of the years.
Among the largest economies in the EU, France grew at 0.6%, Germany 0.7% and Spain 0.8%. Italy could only manage a 0.3% growth rate while Greece contracted by 0.5%, Poland slipped by 0.1% and Hungary suffered a 0.8% drop in national income.Among the largest economies in the EU, France grew at 0.6%, Germany 0.7% and Spain 0.8%. Italy could only manage a 0.3% growth rate while Greece contracted by 0.5%, Poland slipped by 0.1% and Hungary suffered a 0.8% drop in national income.
Related: EU jobless rate hits seven-year low; US data mixed – as it happenedRelated: EU jobless rate hits seven-year low; US data mixed – as it happened
In the fourth quarter of 2015, GDP grew by 0.4% across the 19-member eurozone and 0.5% across the EU.In the fourth quarter of 2015, GDP grew by 0.4% across the 19-member eurozone and 0.5% across the EU.
In May the European commission forecast euro area growth of 1.6% and EU growth of 1.8% in 2016. If the current momentum is maintain, analysts said these figures would need to be revised upwards, though most have warned that this depends on the UK voting to remain in the EU. In May, the European commission forecast euro area growth of 1.6% and EU growth of 1.8% in 2016. If the current momentum is maintain, analysts said these figures would need to be revised upwards, though most have warned that this depends on the UK voting to remain in the EU.
Howard Archer, chief economist at IHS Global Insight, warned that uncertainty surrounding the path of global growth could slow regardless of the referendum vote. Howard Archer, chief economist at IHS Global Insight, warned that uncertainty surrounding global growth could slow regardless of the referendum vote.
He said: “It is probable that Eurozone GDP growth will soften in the second quarter. Global economic uncertainties and problems are still a handicap for Eurozone growth not only through limiting exports but also through limiting the upside on business and consumer confidence. He said: “It is probable that eurozone GDP growth will soften in the second quarter. Global economic uncertainties and problems are still a handicap for Eurozone growth not only through limiting exports but also through limiting the upside on business and consumer confidence.
“It is also notable that first quarter growth was clearly helped in some countries (notably Germany) by the mild weather helping construction activity.“It is also notable that first quarter growth was clearly helped in some countries (notably Germany) by the mild weather helping construction activity.
“Nevertheless, there are important positives for Eurozone economic activity and we believe it should be able to sustain steady growth around 0.4% quarter-on-quarter. “Nevertheless, there are important positives for eurozone economic activity and we believe it should be able to sustain steady growth around 0.4% quarter-on-quarter.
“Consequently we expect eurozone GDP growth to come in at 1.7% in 2016, which would be up slightly from 1.6% in 2015 and the best performance since 2010.”“Consequently we expect eurozone GDP growth to come in at 1.7% in 2016, which would be up slightly from 1.6% in 2015 and the best performance since 2010.”