- IHS Global Insight
The Euro zone posted mixed fundamentals with the economy growing strongly and unemployment falling slightly while consumer prices dropped yet again into deflation territory. The flash estimate for Euro zone gross domestic product rose 0.6% in the first quarter from the previous quarter, compared with expectations for growth of 0.4%, according to Eurostat. On an annual basis, Euro zone's economic activity expanded 1.6% in the first quarter, the same as in the quarter to December, while analysts had forecast a rise of 1.4%. Meanwhile, unemployment in the Euro zone for March declined slightly to 10.2%, the lowest rate recorded in the region since August 2011, from 10.4% in the previous month.
However, annual inflation rate in the Euro area remained in negative territory for the third consecutive month in April. The latest flash estimate showed that consumer prices slid 0.2% in April, from a flat reading of 0.0% in March. On an annual basis, core inflation, which strips out volatile components including oil and food, climbed 0.8% in April, down from the 1.0% gain reported in March. The data came after the European Central Bank deployed further stimulus measures in March in an attempt to underpin growth and inflation, which is currently a way off from the bank's target of below, but close to, 2%.
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