Eurozone GDP Growth Accelerates To 0.6%

(RTTNews) - The euro area economic growth doubled in the first quarter on household spending, investment and exports, official data revealed on Friday.

Gross domestic product logged a quarterly growth of 0.6 percent in the first quarter, which was faster than the initial estimate of 0.3 percent, Eurostat said. This followed a 0.3 percent rise in the fourth quarter of 2024.

On a yearly basis, economic growth improved to 1.5 percent from 1.2 percent. The first quarter rate was revised up from 1.2 percent.

The expenditure-side of GDP showed that household consumption grew 0.2 percent, while government spending remained flat.

Growth in gross fixed capital formation rose at a stronger pace of 1.8 percent after a 0.7 percent gain.

Exports grew 1.9 percent following a flat growth in the preceding quarter. At the same time, imports rose 1.4 percent, reversing a 0.1 percent drop.

Changes in inventories provided a negative contribution of 0.1 percentage point to the growth.

The number of employed persons rose 0.2 percent, slightly faster than the 0.1 percent rise in the previous quarter. Compared to the same period of last year, employment increased 0.7 percent.

Eurostat reported that labor productivity based on persons increased 0.8 percent year-on-year in the first quarter. Based on hours worked, productivity grew 1.1 percent.

This week, the European Central Bank slashed its interest rates by 25 basis points as inflation eased below the 2 percent target. The bank has reduced interest rates by a quarter basis points each in every rate-setting session since September.

The ECB staff projected Eurozone GDP growth to average 0.9 percent this year and 1.1 percent next year.