The Eurozone economy achieved faster-than-expected growth in the first quarter of the year, marking a pick-up from its lacklustre performance at the end of 2018, official statistics have revealed.
Economic growth in the currency area was 0.4 per cent in the first quarter compared to the quarter before, double the rate of 0.2 per cent seen in the final three months of 2018.
The figure took the annual growth rate for the first quarter to 1.2 per cent, and will cheer European policymakers as a sign that the continent may be recovering from an economic slump.
The euro climbed against the dollar on the news. It had risen 0.34 per cent shortly after 1.30pm UK time, to buy $1.122.
Economists had predicted quarterly growth of 0.3 per cent and an annual increase of 1.1 per cent. The European Central Bank (ECB) had forecast growth of just 0.2 per cent in the first quarter.
The Eurozone and European Union economies have been hit hard by global economic headwinds, trade tensions with the US, the ongoing Brexit negotiations, and regulation-driven slowdown in Germany.
Today’s figures from Eurostat, the EU’s statistics body, are first estimates and include data from Germany that is yet to be released. The stronger growth indicates that the struggling German economy performed well in the first quarter.
In the EU as a whole, first quarter growth was 0.5 per cent, taking annual growth to 1.5 per cent. In the previous quarter, the EU's economy grew by 0.3 per cent.
European Union statistics body Eurostat also revealed that euro area unemployment fell to 7.7 per cent in March, its lowest rate since September 2008.
Barret Kupelian, senior economist at PwC, said the data “was above expectations and the 24th quarter of consecutive growth recorded since 2013”.
He added the quarterly figure “suggests that the soft patch of German output growth recorded in the last two quarters of 2018 has probably ended”.
Joshua Mahony, senior market analyst at IG, said: “This is the best rate of growth since 2017 and highlights a potential fightback after a downbeat 2018.”
He said: “With the EU GDP growth rate coming in at 0.5 per cent, there is little surprise that we are seeing gains across both euro-dollar and sterling-dollar in response.”
The pound had climbed 0.66 per cent against the dollar just after 1.30pm, to buy $1.301.
Earlier today, official figures showed that the economy of France – the second biggest in the Eurozone – grew 0.3 per cent in the first quarter of the year, the third quarter in a row that it has grown at that rate.
Figures for Germany showed that unemployment had fallen by much more than expected in April, adding to hopes that the domestic economy will boost growth in a country that has been hurt by a fall in demand for its products.