Eurozone GDP edges higher in first quarter

The Eurozone economy grew only marginally in the first quarter, official data showed on Tuesday, in line with expectations.

According to Eurostat, the statistical office of the European Union, GDP rose by 0.1% and by 0.2% across the whole bloc, in line with both consensus and the flash forecast.

In the fourth quarter, Eurozone GDP was flat while across the EU it eased 0.1%.

Year-on-year, seasonally-adjusted GDP increased by 1.3% in the Eurozone and by 1.2% in the EU.

Labour market data released alongside the GDP figures, meanwhile, showed the number of employed persons increased by 0.6% in both the Eurozone and EU in the first quarter.

Year-on-year, employment growth was 1.7% and 1.6% in the Eurozone and wider bloc respectively.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: "The Eurozone economy managed to eke out some growth in the first quarter - just.

"Looking ahead, we think GDP growth will remain subdued as a rebound in household spending, thanks to easing inflation and a pick-up in wage growth, and continued boost from net trade will probably be largely offset by falling investment, as high interest rates and tighter lending standards bite."

She added that the pick-up in employment growth provided "more evidence of a resilient labour market. The quarter-on-quarter increase means that there were 10m people more in employment at the end of the first quarter than before the pandemic".

"A likely continued increase in the labour force, particularly in the periphery, means we look for the unemployment rate to remain more or less unchanged for the rest of the year."

Eurostat also said on Tuesday that the seasonally-adjusted trade balance in the Eurozone was a €17bn surplus in March, compared to a revised €0.2bn deficit a month previously.

On an unadjusted basis, the trade balance swung to a €25.6bn surplus in the first quarter from a €20bn deficit a year previously.

The increase was attributed to falling energy imports and higher exports of machinery, vehicles and chemicals. Imports from Russia - once one of Europe’s biggest energy suppliers - was 72.1% lower.