Biggest Surprise of European GDP is German Slowdown

A slowdown in Germany weighed on the euro zone in the first quarter, but the bloc’s economy still grew at its fastest in almost two years as cheap food and fuel boosted spending and a central bank stimulus program kicked in.

Gross domestic product in the 19 countries sharing the euro rose 0.4 percent quarter-on-quarter for a 1.0 percent year-on-year rise – just below forecasts in a Reuters poll of economists.

European Union statistics office Eurostat gave no detailed breakdown with Wednesday’s data, while economists said growth was likely to have been helped by lower food and energy prices, a weak euro and the asset-buying program the European Central Bank started in early March.

“It is evident that improved growth was due to strengthened domestic demand. Domestic demand was certainly behind the improved growth in France and Italy, and it also reportedly held up reasonably well in Germany,” said Howard Archer, economist at IHS Global Insight.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza