Eurozone: GDP expansion continues at slower pace in Q1
June 4, 2014
In the first quarter, Eurozone GDP expanded 0.2% over the previous period (Q4 2013: +0.3% quarter-on-quarter). The result was in line with the flash estimate released by the statistical office (Eurostat) on 15 May and marked the fourth consecutive expansion following a streak of six periods of contraction—the longest recession in the Euro area’s history. On an annual basis, the economy expanded 0.9%, which was up from the 0.5% expansion recorded in the previous quarter and marked the strongest reading in more than two years.
The slight deceleration in Q1 was the result of a weaker external sector, while domestic demand improved compared to the previous quarter. Private consumption rose 0.1% over the previous quarter, which was up from the flat reading recorded in Q4. Government consumption increased 0.3% over the previous quarter, which marked a rebound over the 0.4% drop recorded in Q4. That said, fixed investment slowed from a 0.9% increase in Q4 to a 0.4% rise in Q1. Overall, domestic demand expanded 0.4% compared to the previous quarter, which contrasted the 0.1% expansion drop in Q4.The result also benefitted from a positive shift in inventories.
Exports of goods and services rose 0.3% over the previous quarter, which was down from the 1.4% increase recorded in Q4. Meanwhile, imports grew 0.8% (Q4: +0.7% qoq). As imports outpaced exports, the contribution of net exports to overall growth swung from plus 0.3 percentage points in Q4 to minus 0.2 percentage points in Q1.
Author: Armando Ciccarelli, Head of Data Solutions