Eurozone economy strengthens despite Ukraine war
The Eurozone economy strengthened in the first quarter, official data showed on Tuesday, despite the impact of the war in Ukraine.
According to flash estimates from Eurostat, the European Union’s statistics office, GDP rose by 0.3% quarter-on-quarter in the first three months of the year, and by 0.4% across the wider bloc.
That compares to growth of 0.3% and 0.5% for the Eurozone and EU respectively in the fourth quarter.
Year-on-year, seasonally-adjusted GDP increased by 5.1% in the first quarter in the Eurozone, while the EU as a whole reported a 5.2% improvement.
Among individual members, Germany – the bloc’s largest economy – reported GDP growth of 0.2% in the first quarter, compared to a 0.3% fall in the final months of 2021. GDP growth was 0.3% in Spain, compared to 2.2% in the fourth quarter, was flat in France, and in Italy it declined 0.2%.
Eurostat noted that employment had also risen during the quarter, by 0.5% in the Eurozone and 0.4% in the EU quarter-on-quarter. In the last three months of 2021, employment rose by 0.4% in both the Eurozone and across the wider bloc.
Year-on-year, employment rose by 2.6% in the Eurozone and by 2.5% in the EU.
Russia invaded Ukraine on 24 February, and the crisis has weighed heavily on the European economy, disrupting supply chains, hiking energy prices and hitting confidence.
Eurostat had previously expected GDP growth to slow as a result, and initially forecast quarter-on-quarter growth of 0.2% and year-on-year growth of 5.0%.
However, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the current quarter was unlikely to be as strong. “The second quarter will likely be worse, due to rising energy costs and the way on the continent. The European Central Bank is expected to raising rates by this summer, to tame inflation.”