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.