Euro Area: GDP growth for the first quarter revised upwards
GDP growth accelerated to 0.6% on a seasonally-adjusted quarter-on-quarter basis in the first quarter, according to a complete release. The print came in above the previous estimate of a 0.3% quarterly expansion and the 0.2% increase registered in the fourth quarter of last year.
Restocking was mainly behind Q1’s result, as changes in inventories added 0.6 percentage points to growth. Meanwhile, private consumption contracted 0.7% in Q1, marking the steepest decline since Q1 2021 (Q4 2021: -0.3% s.a. qoq), amid soaring inflation due to elevated commodity prices. Moreover, public spending dropped at the sharpest pace since Q3 2021, contracting 0.3% (Q4 2021: +0.4% s.a. qoq). Additionally, fixed investment growth softened to 0.1% in Q1, from 3.1% in the previous quarter, weighed down by an unfavorable economic backdrop due to the outbreak of the war in Ukraine and the prospect of interest rate hikes from the European Central Bank.
On the external front, exports of goods and services growth fell to 0.4% in Q1, marking the worst result since Q2 2020 (Q4 2021: +2.7% s.a. qoq). In addition, imports of goods and services deteriorated, contracting 0.6% in Q1 (Q4 2021: +4.7% s.a. qoq). overall, the external sector added 0.2 percentage points to growth.
On a year-on-year basis, economic growth sped up to 5.4% in Q1, from the previous period’s 4.7% increase. Q1’s reading marked the fastest expansion since Q2 2021.