The Eurozone has posted positive first quarter results, beating out the United States in GDP growth. The Euro Area (EA19) as well as the broader union (EU28) have had their seasonally adjusted GDP rise by 0.6% in the first quarter of 2017, signifying steady growth from the fourth quarter of 2016 in which GDP grew by 0.5% and 0.6% respectively. For contrast, the United States GDP rose by 0.3% from the previous quarter.
EA19 is made up of nineteen countries: Austria, Belgium, Germany, Greece, Estonia, Ireland, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Slovakia and Finland.
EU28 also includes Bulgaria, the Czech Republic, Poland, Denmark, Croatia, Hungary, Romania, Sweden and the United Kingdom.
During the first quarter, Romania (1.7%), Latvia (1.6%), Slovenia (1.5%) and Lithuania (1.4%) had the highest gain in GDP, while the United Kingdom had the lowest of 0.2%. These gains came as a result of increased household final consumption expenditures which are recorded at a 0.3% gain for EA19 and a 0.4% gain for the broader EU28. Furthermore, exports also rose 1.2% and 1.0% in EA19 and EU28 respectively, however this does signify a drop of 0.7% and 1.0%, respectively, from the previous quarter. All of this shows that the Euro Zone is slowly yet steadily regaining its foothold on the economy, even with Brexit looming large over the area.
As for the biggest gainers since the first quarter of 2016 the smaller economic entities benefited the most from Europe Central Bank’s conservative policies, with Romania’s (5.6%) increase leading the pack. Slovenia (5.0%), Poland (4.2%) and Lithuania (4.1%) and Estonia (4.0%) round of the top 5 gainers over the year. In comparison, the United States has grown 2.0% since the first quarter of 2016.
Unfortunately, the ECB has said that inflation is still weak and growth might be plateauing. With the current deposit rate sitting at -0.4% the ECB is closely monitoring the situation in the Zone, but consider the risks balanced, according to President Mario Draghi. With the Central Bank taking more control over the failing institutions around the Euro Zone, most recently triggering Santander’s buyout of Spain’s Banco Popular, the future looks a little brighter for the economically embattled Union.