Spain leads Eurozone GDP growth

30 Apr 2019

flagData from Eurostat revealed that in the first quarter of 2019, the Eurozone’s economy expanded more than what was forecast.

The 19 nations’ economy grew by 0.4% from the last quarter of 2018 and 1.2% from the first three months of the year prior – while analysts had predicted growth of 0.3% and 1.1% respectively. This data only forms part of Eurostat’s ‘flash’ estimate report, although the detailed figures will be released on May 15.

Spain, being the region’s fourth largest economy, led the growth with a 0.7% expansion recorded over the first three months of the year – despite political uncertainty surrounding a national election. The previous quarter had expanded by 0.6%, which was also the expected growth for Q1 2019.

The positive results put off concerns related to a recession led by Germany.

ING's chief Belgium economist Peter Vanden Houte said: "Paraphrasing Mark Twain who said reports of his death were greatly exaggerated, we can say that calls for a Eurozone recession were certainly premature. Declining unemployment and gradually rising wages are supporting household consumption, while easy financing conditions remain in place."

He went on to say: "At the same time, the recovery is getting old and no one should expect from a greybeard that he will continue to run at the pace he could achieve in his youth. And indeed, the elderly are also more vulnerable to shocks. While there are still a number of risks (think of trade tensions, higher oil prices and the Brexit uncertainty) the improving international picture is likely to support Eurozone exports in the coming months."

Meanwhile, France also recorded a surprising 0.3% growth, despite a series of anti-government protests that have shaken up the French capital. Italy’s GDP expanded by 0.2%, while the Eurozone’s unemployment decreased to 7.7% - which was better than the 7.8% forecast and was also the lowest level since September 2008.