Eurozone GDP Q1 2017


Eurozone: Complete data reveals growth inches up in Q1

June 8, 2017

The third estimate of GDP released by Eurostat revealed that growth had accelerated at the start of 2017. GDP increased a seasonally-adjusted 0.6% in Q1 over the previous quarter, which was a notch above the preliminary estimate and Q4’s figure. The result marks the fastest growth in two years as activity firms across the common-currency bloc.

Q1’s upturn came on an improvement in the external sector, which did not subtract from growth as in the previous period. A pick-up in global demand fueled 1.2% growth in exports, slightly below Q4’s 1.7%. The deceleration in import growth was greater, fueling a neutral contribution to GDP and the improvement in the headline figure. On the demand side, the Eurozone’s story remained broadly unchanged with improving labor markets, less tight fiscal policies and easy monetary policy fueling a solid performance. Private consumption grew 0.3% and government spending increased 0.4%. However, investment growth more than halved and was a weak spot in the GDP print, coming in at 1.3% after a notable 3.4% in Q4.

Looking at the individual countries, growth is broadening across the region and no economy contracted in Q1. The positive result suggests that the Euro area has managed to shake off multiple political hurdles, including a Brexit-induced slowdown, and illustrates that the recovery remains firm. On an annual basis, GDP growth ticked up from 1.8% in Q4 to 1.9% in Q1.

An improving labor market and a stronger global economy should support growth this year. FocusEconomics Consensus Forecast panelists expect the Euro area economy to expand 1.7% in 2017, which is unchanged from last month’s forecast. For 2018, panelists expect the economy to expand 1.6%.

Author: Angela Bouzanis, Lead Economist

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Eurozone GDP Chart

Euro GDP Q1 2017 1

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: Eurostat

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