Eurozone: Second estimate confirms bright start to the year
May 16, 2017
A second flash estimate reaffirmed solid growth momentum in the Eurozone’s economy in the first quarter of 2017, as the region proves resilient to numerous political risks at home and abroad. The Eurozone economy increased a seasonally-adjusted 0.5% in Q1 from the previous quarter, which matched Q4’s reading and the first preliminary estimate published on 3 May. 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 Germany and Spain in the first quarter of the year. However, activity lost some momentum in France and remained steady in Italy. More complete GDP data will be released on 8 June.