Euro area GDP clocks in at 0.5% for first quarter, as expected

Economic growth in the Eurozone accelerated slightly at the start of the year, spearheaded by growth in Portugal, Spain and Germany.

Gross domestic product across the entire single currency bloc was ahead by 1.0% quarter-on-quarter during the first three months of 2017, according to a preliminary estimate from Eurostat, and up by 1.7% on a year ago.

That was as expected by economists.

In comparison to the previous quarter, Portuguese GDP expanded at a 1.0% clip, with growth in Spain clocking in at 0.8% and in Germany at 0.6%.

German GDP had increased by 0.4% on the quarter over the prior three months.

French GDP on the other hand slowed from a quarterly pace of 0.5% for the three months to December 2016 to 0.3% for the three-month stretch extending to March 2017.

In Italy growth was steady at 0.2% quarter-on-quarter.

"The healthy first-quarter Eurozone GDP growth performance was anticipated by the ECB. However, while the ECB was notably more upbeat about Eurozone growth at its 27 April meeting, this was not echoed in its inflation assessment which remained cautious. Nevertheless, the healthy first-quarter Eurozone growth performance reinforces belief that the ECB will adopt a more balanced policy stance at its June meeting, and likely drop the reference to lower interest rates in its forward guidance," said Dr. Howard Archer, chief UK+European economist at IHS Global Insight.