REPOST: Euro zone growth revised up to highest rate in a year in first quarter

The Eurozone economic growth in the first quarter of 2017 reached its highest rate in more than a year, according to a revised reading by the EU statistics agency, Eurostat. Reuters has the full story:

Workers are seen in silhouette as they construct scaffolding in the port of Cannes, France, April 4, 2016. REUTERS/Eric Gaillard

 

The euro zone economy grew by more than previously estimated in the first quarter and at its fastest rate in a year, EU statistics agency Eurostat said on Thursday, ahead of a European Central Bank meeting likely to keep policy unchanged.

Eurostat said the 19-country euro zone expanded by 0.6 percent quarter-on-quarter and by 1.9 percent year-on-year. That compared with earlier estimates of 0.5 and 1.7 percent respectively.

On an annualized basis, the euro zone economy was expanding at a rate of 2.3 percent in the Jan-March period, far outstripping the 1.2 percent rate of the United States.

Solid economy growth but subdued inflation has left the ECB in a quandary. ECB President Mario Draghi is yet to be convinced that a recent rebound of inflation is durable because wage growth remains sluggish.

The ECB is widely expected to keep policy unchanged on Thursday, including its 2.3 trillion euro ($2.6 trillion) bond-buying program and sub-zero interest rates, despite resistance from cash-rich Germany.

However, the robust growth could lead the ECB to remove a reference to “downside risks” in its statement.

Eurostat said household consumption contributed 0.2 percentage points and gross fixed capital formation 0.3 points and government consumption 0.1 points to the first-quarter growth figure. The contributions of external trade and inventories was neutral.