-Howard Archer, an economist at IHS Global Insight
The 17-nation economy's current account surplus surged to the all-time high in March, due in part to the increase in exports, the European Central Bank data showed Wednesday. A broad measure of an economy's international transactions rocketed to 25.9 billion euros in March, up from a downwardly revised 14.6 billion euros in a month earlier. In the meantime, analysts had expected a surplus of only 14.2 billion euros in March. In theory, an improvement of the current account should provide a boost to the economy; however weak demand within the region is holding the region back. The Eurozone economy contracted for the sixth straight quarter in the first three months of this year, as the gross domestic product shrank 0.2%.
"The first-quarter contraction reinforces pressure on the ECB to come up with further measures to try and support Eurozone growth," said Howard Archer, an economist at IHS Global Insight in London. "An interest rate cut to 0.25% looks ever more possible, while the ECB will also continue to look into the case for a negative deposit rate and ways of getting more credit through to smaller companies."
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