Eurozone: Economy starts 2017 on bright note
May 3, 2017
Momentum remained firm in the Eurozone’s economy in the first quarter of 2017, as the region proves resilient to numerous political risks at home and abroad. According to a preliminary estimate, the Eurozone economy increased a seasonally-adjusted 0.5% in Q1 from the previous quarter, which matched Q4’s reading and met FocusEconomics analysts’ expectations. Compared with the same quarter of 2016, seasonally-adjusted GDP expanded 1.7% in Q1, which was a notch below the 1.8% increase seen in Q4.
Although the preliminary GDP data did not include a breakdown by components, the Eurozone’s growth story is expected to have remained unchanged. Domestic demand is in the driver’s seat as an improving labor market and expansionary monetary policy support economic activity. Economic sentiment rests at a multi-year high and investment is likely to have kicked into a higher gear in Q1. While exchange rate developments have been favorable for export growth, rising imports likely tempered the external sector’s contribution.
Meanwhile, additional data released by statistical offices across the continent showed that growth gained steam in Austria, Belgium and Spain in the first quarter of the year. However, activity lost some momentum in Lithuania and weaknesses persisted in the French economy. More complete GDP data will be released on 16 May and 8 June.