Eurozone GDP rises less than expected in first quarter

The Eurozone economy grew less than expected in the first quarter, according to the flash estimate from Eurostat on Friday.

Euro-area gross domestic product rose 0.5% in the first three months of the year compared to the fourth quarter. Analysts had pencilled in 0.6% quarter-on-quarter growth in the first quarter following a 0.3% gain in the previous three months.

Compared with the same period a year earlier, first quarter GDP in the euro-area increased 1.5% following a 1.6% increase in the fourth quarter. It missed analysts’ forecasts for a year-on-year gain of 1.6%.

“ECB president Mario Draghi won’t be lulled into a false sense of security by today’s stable GDP numbers,” said Dennis de Jong, managing director at UFX.com.

“Solid household consumption continues to drive steady growth, but investment in the region remains below par, with global eyes on the upcoming Brexit referendum. Some investors may hold their breath until then, but the challenge for Draghi is to make sure that growth picks up quickly in the latter half of the year – regardless of the result of the vote.”