Eurozone GDP


Eurozone: Eurozone economy accelerates in first quarter at fastest pace in four years

May 13, 2015

A return to expansion mode in France and Italy helped to buttress the Eurozone economy in the first quarter this year. A preliminary estimate released by Eurostat on 13 May showed that Eurozone’s GDP increased a seasonally-adjusted 0.4% in Q1over the previous quarter. The reading matched market expectations and followed the 0.3% rise observed in Q4 2014. Q1’s result also represented the fastest expansion in four years; and, for the first time since Q1 2011, the Eurozone economy grew more quickly than both the U.S. and U.K. economies. Meanwhile, in annual terms, the economic growth picked up momentum and inched up from 0.9% in Q4 to 1.0% in Q1.

For the first time since Q2 2010, all four largest economies in the common-currency area registered growth. Spain led the pack, expanding a seasonally-adjusted 0.9% in Q1 (Q4 2014: +0.7% qoq), followed by France, which grew an astonishing 0.6% in Q1 (Q4: 0.0% quarter-on-quarter). Meanwhile, Italy’s economy increased 0.3% qoq, above the flat reading tallied in the previous period. Dampening the flames of joy was the stumble in growth seen in the Eurozone’s largest economy. Germany’s economy slowed down from a solid 0.7% increase in Q4 to a 0.3% expansion in Q1. Elsewhere in the region, the Greek economy entered into recession in Q1 after contracting 0.2% (Q4: -0.4% qoq).

The Eurozone economy benefited from the sharp fall in oil prices, a weak euro and a boost in confidence from the European Central Bank’s (ECB) stimulus plan. Christian Schulz, Senior Economist at Berenberg Bank commented:

Strong tailwinds from cheap oil, a weaker euro and a much more aggressive ECB helped across the currency area, while the Russian risk receded and Greece's tragedy has not had a major impact outside Greece itself.

However, according to Peter Vanden Houte, Chief Economists at ING, downside risks to growth in the coming quarters persist:

Growth is clearly broadening across the Eurozone. That said, the jury is still out whether Eurozone growth has reached enough escape velocity to see a self-sustained recovery, as the first confidence indicators for the second quarter levelled off a bit, now that oil prices have increased and the euro exchange rate strengthened. A resolution for the Greek problems will also be needed to lift the uncertainty that still prevents businesses to increase investment

FocusEconomics Consensus Forecast panelists expect the economy to expand 1.4% in 2015, which is up 0.1 percentage points from last month’s forecast. For 2016, panelists expect the economy to expand 1.7%.

Author:, Senior Economist

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Eurozone GDP Chart

Euro GDP Q1 2015

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

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