- Peter Vanden Houte, an economist at ING
The Euro zone's economic output rose 0.4% in the first quarter, faster than both the US and UK for the first time since the first quarter of 2011. That marked an increase from the 0.3% growth recorded in the December quarter of last year, but was slightly weaker outcome than the 0.5% rate estimated by economists. On an annualized basis, the economy grew 1.6%. For the first time since the first half of 2010, all four of the Euro zone's biggest economies recorded growth, while Spain is leading the recovery. The French economy smashed expectations, expanding by 0.6% in the first quarter following zero growth in the previous quarter. Italy also returned to expansion, with GDP growing by 0.3%, and Spain was a star performer, growing by 0.9%. A return to growth in France, Italy, and Spain was enough to overcome a slowdown in Germany. Germany's economy, the Euro area's powerhouse, slowed more steeply than expected, to record growth of 0.3% compared with 0.7% in the previous period. However, consumer prices in Germany climbed in April, with inflation rising 0.5% year-on-year, following the 0.3% increase in the preceding month. Faster and more evenly spread growth will fuel hopes that 2015 could mark a turning point in the Euro zone's efforts to recover from the debt crisis, supported by an extraordinarily mix of stimulus measures from the European Central Bank, a considerably weaker Euro, as well as lower oil prices. Yet, policy makers remain concerned over strength of recovery.
© Dukascopy Bank SA