Eurozone economy grows more than expected in first quarter

The eurozone grew more than expected in the first quarter compared to the previous three months, Eurostat revealed on Tuesday.

Eurostat's revised its second estimate of first quarter euro-area gross domestic product higher to 0.6% quarter-on-quarter growth from an initial forecast of 0.5%.

The statistical office of the European Union said that the increase was supported by strong household spending, which rose to 0.6% from 0.3% the previous quarter, and an increase in exports which rose by 0.4%.

Romania’s economy grew at the fastest pace at 1.6%, and both Bulgaria and the eurozone’s largest economy Germany grew by 0.7%. Spain, Lithuania, Austria and Slovakia all grew by 0.8%, France 0.6% and Italy 0.3%.

Greek's economy contacted by 0.5%, Hungary by 0.8% and Poland by 0.1%.

On the year, the eurozone's first quarter GDP rose 1.7%, up from a prior estimate of 1.5%.

Economists had expected no change to the year-on-year or quarter-on-quarter forecasts.

Eurostat also reported that the average rise in GDP for the EU 28-nation block was 0.5%. This surpassed the UK’s quarterly growth of 0.4% reported in April.

However, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said, "Overall, today’s report shows that first, and even second, estimates of the GDP growth in the euro area need to be taken with a pinch of salt.

"In any case, the key story remains that the eurozone economy had a strong start to the year, mainly due to solid domestic demand."