Eurozone recovery better than expected, new figures show

New figures show the eurozone countries are enjoying an accelerating economic recovery – but the same data shows inflation went negative across the bloc in April.

Growth was at 0.6 per cent for the first quarter of this year, double the 0.3 per cent rate seen in the last three months of 2015, the figures from the European Commission's statistics bureau show.

Eurostat's data shows that the 19-nation bloc, which does not of course include the UK, now has a bigger combined economy than it did at the start of the financial crisis eight years ago.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

The two-year race to the bottom of oil prices is one factor – it has benefited nations that are net oil importers, particularly Germany. The fall in price of the euro has also been good news for major exporters.

Another factor has been "looser budgetary policies by government[s]", says the BBC, which have "freed up resources in some of the region's debt-laden economies".

Howard Archer of IHS Global Insight said he expected the eurozone to grow at a lower rate this quarter but to return to somewhere around 0.4 per cent quarter-on-quarter after June.

He told the BBC: "Global economic uncertainties and problems are still a handicap for eurozone growth, not only through limiting exports but also through weighing down on business and consumer confidence.

"The risk of recurrent terrorist attacks and the possibility of the UK voting to leave the EU in June's referendum are also uncertainties that could impact on eurozone growth."

Other data from Eurostat shows that the block is back in deflation, or negative inflation, with goods and services becoming cheaper as time passes. Inflation hit minus 0.2 per cent in the zone in April, down from zero in March.

Meanwhile, the bloc's unemployment rate is at its lowest for four-and-a-half years, at 10.2 per cent.