Eurozone GDP Growth Gains Strength In Q1
2025-04-27
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(fxcue news) - Euro area economic growth accelerated in the first quarter as exports may have benefited from higher demand from the U.S. ahead of the imposition of higher trade tariffs.
The quarterly growth in gross domestic product doubled to 0.4 percent from 0.2 percent seen in the fourth quarter of 2024, preliminary flash estimates from Eurostat showed on Wednesday.
Economists had forecast the single-currency economy to grow again by 0.2 percent.
Year-on-year growth in Eurozone was steady at 1.2 percent in the first quarter. This was also stronger than the forecast for 1.0 percent expansion.
The next estimate for the first quarter is slated to be released on May 15. The details of GDP components for the first quarter will be available only by July.
The currency bloc started the year on a stronger footing than anticipated and activity surveys suggested, Capital Economics economist Franziska Palmas said.
Nevertheless, the economist expects growth to slow sharply in the next six months as the U.S. tariffs introduced in April will hit activity and any boost from the German fiscal stimulus will mostly be felt next year.
Among bigger economies of the currency bloc, Spain showed the fastest expansion of 0.6 percent in the first quarter. Italy's growth improved to 0.3 percent from 0.2 percent.
The German economy grew only 0.2 percent, but it offset the 0.2 percent contraction in the preceding quarter. Similarly, France's growth was subdued at 0.1 percent after a 0.1 percent fall a quarter ago.
Meanwhile, economic growth in the EU softened to 0.3 percent on a quarterly basis from 0.4 percent in the prior quarter. On a yearly basis, growth remained unchanged at 1.4 percent.
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