Eurozone economy The latest data from Eurostat showed on Friday that the economy recovered in the first quarter, as initially expected, driven by household spending and strong net exports.
Gross domestic product increased 0.3 percent from the previous quarter, reversing a 0.1 percent decline in the fourth quarter of 2003. This growth rate confirmed a second estimate released on May 15.
Breaking down spending, household consumption grew steadily at 0.2% over the quarter, while government spending remained stable.
Net overseas demand was strong in the March quarter, with exports rising 1.4%, offsetting a 0.3% fall in imports.
The negative contribution came from gross fixed capital formation, which fell by 1.5% in the euro area. Changes in inventories also fell by 0.3%, the data showed.
On an annualized basis, economic growth improved to 0.4 percent from 0.2 percent, in line with earlier estimates for the first quarter and revised up from 0.1 percent in the December quarter. The annual growth was driven by higher household and government spending.
In the EU, overall GDP grew by 0.3% in the third quarter after remaining stable in the previous quarter. Annual growth accelerated to 0.5% from 0.3%.
Among member states, Malta had the highest quarterly economic growth, expanding by 1.3%, followed by Croatia's economy, which expanded by 1.0%.
Quarterly employment growth in the first quarter was unchanged at 0.3%, as expected, while annual growth slowed to 1.0% from 1.2%.
The European Central Bank on Thursday forecast the euro zone's economy to grow 0.9% this year, 1.4% next year and 1.6% in 2026.
The ECB cut interest rates this week for the first time since 2019, citing an improving inflation outlook. But the central bank remains cautious on price developments, given solid service inflation and wage growth.
RTT News Staff Writer
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