Eurozone: Q1 GDP data confirms slow start to 2018
May 15, 2018
A second flash estimate released by Eurostat confirmed that the Eurozone economy lost steam in the first quarter, following the robust performance recorded in 2017. GDP expanded a seasonally-adjusted 0.4% in Q1 from the previous quarter, marking the slowest pace since Q3 2016 and coming in below Q4 2017’s 0.7% increase. The first-quarter result matched the first preliminary reading released on 2 May. Compared with the same quarter of 2017, seasonally-adjusted GDP expanded 2.5% in Q1, which was below Q4 2017’s 2.8% increase and also matched the preliminary reading.
The flash estimate did not include a breakdown by components, but weaker sentiment and a strong euro likely weighed on the Eurozone’s economic performance. Additional data on individual countries confirmed that growth waned in several key players, including Germany (+0.3% quarter-on-quarter), France (+0.3% qoq), Austria (+0.7% qoq), and Belgium (+0.4% qoq) in the first quarter. Meanwhile, Spain continued to grow at a brisk pace (+0.7% qoq), and Italy remained on its steady course (+0.3% qoq). More complete GDP data, including a breakdown by components, will be released on 7 June.
Eurozone GDP Forecast
FocusEconomics Consensus Forecast panelists expect the Euro area economy to expand 2.3% in 2018, which is down 0.1 percentage points from last month’s forecast. For 2019, panelists expect the economy to expand 2.0%.
Author: Lindsey Ice, Economist