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The German economy expanded as initially estimated in the first quarter and avoided a recession, thanks to the rebound in investment and exports. Gross domestic product expanded 0.2 percent sequentially in the first quarter, in contrast to the 0.5 percent decrease in the preceding three months, Destatis reported Friday. The statistical office confirmed the flash estimate published on April 30.

Consumer confidence in the euro area strengthened in May to its highest level since early 2022, while wage growth figures lent support to the view that the European Central Bank is set to stop policy easing with the expected interest rate cut in June.

The euro area private sector activity grew at the fastest pace in a year in May on bigger increases in new orders, employment and an improvement in business confidence, flash survey data from S&P Global showed on Thursday. The flash composite output index posted 52.3 in May, up from 51.7 in the previous month. The score was also above economists' forecast of 52.0.

The European Commission projected the euro area economy to stage a gradual growth amid geopolitical risks and expects inflation to be on the track to hit the target. In the latest Spring economic forecast, released Wednesday, the commission said the single currency bloc will grow 0.8 percent this year, same as the Winter interim forecast.