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Eurozone GDP Growth Doubles In Q1; Unemployment Lowest In Over A Decade

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Eurozone's quarterly economic growth rate doubled in the first three months of the year, topping economists' expectations, and the unemployment rate fell to its lowest level in more than a decade in March.

However, economists were unconvinced that the growth momentum would be sustained in the coming quarters as recent survey indicators have been weak.

Gross domestic product grew 0.4 percent from the fourth quarter of 2018, when the euro area economy expanded 0.2 percent, preliminary flash data from the statistical office Eurostat showed on Tuesday.

Economists had forecast 0.3 percent growth for the first quarter.

The pace of growth was the strongest since the second quarter of 2018, when the economy expanded at the same rate.

On a year-on-year basis, GDP rose 1.2 percent in the first quarter, same as in the previous three months. Economists were looking for 1.1 percent expansion.

In the EU28, the quarterly pace of GDP growth improved to 0.5 percent from 0.3 percent. The year-on-year growth rate was steady at 1.5 percent.

Separately, Eurostat reported that Eurozone's unemployment rate dropped in March to its lowest level since September 2008.

The jobless rate fell to 7.7 percent from 7.8 percent seen in each of the previous two months. Economists had expected the rate to remain steady in March.

Among euro area countries, Germany and the Netherlands recorded the lowest jobless rates, while the highest were seen in Greece, Spain and Italy.

The number of unemployed in Eurozone was 12.63 million in March, down by 174,000 persons from the previous month and by 1.172 million from a year ago.

Unemployment among those under 25 was 2.32 million in the euro area, down 150,000 from last year. The youth jobless rate fell to 16 percent from 17.4 percent.

"While the official data for the start of this year are undoubtedly encouraging, they are inconsistent with the continued weakness in the timelier survey measures of activity," Capital Economics economist Jack Allen said.

Survey data from the European Commission showed on Monday that the euro area economic sentiment weakened for a tenth straight month in April to a near three-year low, amid a sharp deterioration in the morale in industry to its weakest level in about five years.

Flash data from the purchasing managers' surveys had shown that the private sector growth slowed for a second successive month in April amid a decline in manufacturing activity. New export orders fell sharply for the seventh straight month.

"The fact that both surveys are consistent with weak growth suggests to us that the euro-zone economy will grow more slowly in Q2," Allen added.

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