Tuesday 7 June 2016 11:22 am

Eurozone GDP growth confirmed at 0.6 per cent – faster than US and UK

The Eurozone grew a little faster than expected in the first quarter of this year, the most recent back-and-forth revisions to official GDP statistics have revealed. 

Figures published by Eurostat this morning confirmed that the Eurozone economy grew by 0.6 per cent during the first three months of the year, up from the most recent estimation of a 0.5 per cent expansion.

Analysts said the new numbers confirmed the single currency bloc "got off to a strong start to the year," with household spending powering the economy.

Stronger growth will be a boost to the European Central Bank (ECB) which has had to vociferously defend its package of monetary stimulus to critics. One of the Bank's latest tools – the purchase of corporate bonds as part of its €80bn (£62m) a month quantitative easing package – begins tomorrow in a move Mario Draghi hopes will provide yet another boost to inflation prospects.

However, investment growth, which was expected to pick up, slipped back during the period "casting doubt on the idea that improved credit conditions and confidence have finally prompted firms to make up lost ground after years of weak spending," said Jack Allen, European economist at Capital Economics.

Cyprus was the fastest growing Eurozone country in the three months, expanding by 0.9 per cent, while Greece was at the bottom of the list, contracting by 0.5 per cent.

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Despite the revision – which put GDP growth back in line with its first estimate – Capital Economics' Allen said: "There are several reasons to think that growth will be weaker this year than last year.

"The rise in oil prices this year will reduce consumers' spending power. And a combination of slower growth overseas and the fading boost from the euro's depreciation last year will continue to weight on export growth."