Page last updated at 10:01 GMT, Thursday, 15 May 2008 11:01 UK

Euro growth better than expected

A butcher's shop in Berlin
Germany is Europe's biggest economy

Economic growth in the eurozone during the first three months of 2008 was better than expected, figures show.

Gross domestic product (GDP) rose by 0.7% from the previous quarter in the 15 nations using the euro, compared with the 0.5% growth analysts expected.

Eurozone GDP was up by 2.2% compared with the same quarter in 2007.

Separately, Eurostat confirmed that eurozone inflation in April slowed to 3.3% year-on-year from March's record figure of 3.6%.

The strong GDP growth in Europe was "a last hurrah for the eurozone economy" said Fortis economist, Nick Kounis.

The strength of the euro and a fall-off in global growth would dent exports he said, taking their toll on the economy.

And he added that consumer spending growth would only be "moderate", as rising inflation offset wage growth and strong employment.


Figures from Germany's Federal Statistics Office showed the economy grew at its fastest pace in more than 10 years during the first three months of 2008.

GDP grew 1.5% in the quarter, almost double the figure that analysts had forecast, and up from 0.3% in the final three months of 2007.

The statistics office said it showed the economy was "robust" despite wider economic problems.

Germany's growth, its fastest pace since 1996, was "sensational" said Commerzbank economist Matthias Rubisch.

"The forecasts for this full year will have to be revised upwards after this strong start."

The government had forecast that 2008 growth would be 1.7% but Mr Rubisch said this could now be above 2%,.

This compares with 2.5% growth in 2007.

Meanwhile, France said that its GDP had grown by 0.6% in the first quarter of 2008, ahead of predicitions.

And it revised its 2007 growth up to 2.2%, from the 1.9% previously forecast.

The eurozone at a glance
06 May 08 |  Business
German firms 'more pessimistic'
24 Apr 08 |  Business

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