Germany lifts Europe's growth
By Pan Pylas |
May 14, 2011, Saturday
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Print Edition
Print Edition
FORECAST-BUSTING economic growth in Germany and a surprise rebound in Greece helped the eurozone start the new year far better than anticipated, even though Portugal sank back into recession.
Eurostat, the EU's statistics office, yesterday said the economy of the 17 countries that use the euro grew by a quarterly rate of 0.8 percent in the first three months of this year.
That was more than double the 0.3 percent growth posted in the previous three-month period and ahead of analysts' expectations for a 0.6 percent increase. In year-on-year terms, the eurozone economy grew 2.5 percent, more or less in line with what many say should be the eurozone's long-term average.
"The eurozone is therefore significantly outperforming all other major developed economies at the moment," said Chris Williamson, chief economist at Markit.
By comparison, Eurostat said the US grew by a 0.4 percent quarterly rate in the first three months of the year.
Unsurprisingly, given its sheer size, Germany was the main reason the eurozone grew by more than expected. Its 1.5 percent growth during the quarter means the EU's largest economy has now made up all the output lost during the recession.
"Germany is the engine of growth among industrial countries - and not just in Europe," Germany's Economy Minister Philipp Roesler said.
France, the eurozone's second-biggest economy, grew by 1 percent on higher consumer spending and business investment. Northern economies like the Netherlands grew strongly, while Italy and Spain lagged behind.
Perhaps more surprisingly, given the debt quagmire it is in, Greece posted solid growth of 0.8 percent, its first economic expansion since the fourth quarter of 2009.
However, the increase is unlikely a sign of a sustained rebound.
Manos Chatzidakis, head of investment strategy at Pegasus Securities, said the Greek figures were disappointing. "The economy still has a considerable way to go before recovery," Chatzidakis said. "We remain in a very unfavorable situation."
Portugal, another bailout recipient, returned to recession. Its 0.7 percent quarterly decline follows the 0.6 percent drop recorded in the previous three-month period - a recession is classified as two consecutive quarters of negative growth.
Portugal is the third eurozone country to agree to a bailout, following Greece and Ireland.
Eurostat, the EU's statistics office, yesterday said the economy of the 17 countries that use the euro grew by a quarterly rate of 0.8 percent in the first three months of this year.
That was more than double the 0.3 percent growth posted in the previous three-month period and ahead of analysts' expectations for a 0.6 percent increase. In year-on-year terms, the eurozone economy grew 2.5 percent, more or less in line with what many say should be the eurozone's long-term average.
"The eurozone is therefore significantly outperforming all other major developed economies at the moment," said Chris Williamson, chief economist at Markit.
By comparison, Eurostat said the US grew by a 0.4 percent quarterly rate in the first three months of the year.
Unsurprisingly, given its sheer size, Germany was the main reason the eurozone grew by more than expected. Its 1.5 percent growth during the quarter means the EU's largest economy has now made up all the output lost during the recession.
"Germany is the engine of growth among industrial countries - and not just in Europe," Germany's Economy Minister Philipp Roesler said.
France, the eurozone's second-biggest economy, grew by 1 percent on higher consumer spending and business investment. Northern economies like the Netherlands grew strongly, while Italy and Spain lagged behind.
Perhaps more surprisingly, given the debt quagmire it is in, Greece posted solid growth of 0.8 percent, its first economic expansion since the fourth quarter of 2009.
However, the increase is unlikely a sign of a sustained rebound.
Manos Chatzidakis, head of investment strategy at Pegasus Securities, said the Greek figures were disappointing. "The economy still has a considerable way to go before recovery," Chatzidakis said. "We remain in a very unfavorable situation."
Portugal, another bailout recipient, returned to recession. Its 0.7 percent quarterly decline follows the 0.6 percent drop recorded in the previous three-month period - a recession is classified as two consecutive quarters of negative growth.
Portugal is the third eurozone country to agree to a bailout, following Greece and Ireland.
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