Eurozone economy grows at solid pace in Q1

The eurozone economy grew by a solid 0.5 percent in the first three months of the year

3 May 2017 | 14:04

Source: Associated Press

  • Source: Associated Press
  • Last update: 3 May 2017 | 14:04

Pedestrians pass a poster depicting a map of Greece with the letter E being replaced by Euro symbols in Athens, Tuesday, May 2, 2017. (AP Photo/Thanassis Stavrakis)

BRUSSELS: The eurozone economy grew by a solid, if unspectacular, quarterly rate of 0.5 percent in the first three months of the year, official figures showed Wednesday.

The increase reported by statistics agency Eurostat on Wednesday was in line with market expectations but may prove a slight disappointment to some in the markets following a run of other strong economic data across the single currency bloc. A number of economists had predicted a pick-up in the pace of growth from the previous quarter's 0.5 percent.

The eurozone economy has been expanding steadily for a few years now but failed to push into a high gear, largely because the region battled with sky-high debts in many countries, notably Greece.

No country breakdown was provided by Eurostat on Wednesday.

There are hopes that growth will pick up steam in the second quarter following recent surveys indicating an uptick in April, particularly in France. The prevailing view in the markets is that a victory in Sunday's presidential election for centrist Emmanuel Macron over Marine Le Pen from the far-right could further boost the eurozone's second-biggest economy.

A string of general elections in key eurozone states has been identified as a potential risk to economic growth this year, as populist or extremist parties could endanger the region's commitment to the euro. However, defeats for populist politicians in Austria and the Netherlands have shored up confidence in the markets that there won't be a lurch toward a break-up of the single currency or of the wider European Union itself.

However, concerns over Britain's withdrawal from the EU remain. In March, before calling a general election, Prime Minister Theresa May triggered the formal two-year Brexit process. There are already signs that worries over Britain's future are hurting the country's economy — growth slowed to 0.3 percent in the first quarter of the year from 0.7 percent in the previous three-month period.

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