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Last Updated: Friday, 14 May, 2004, 12:59 GMT 13:59 UK
Eurozone in surprise growth spurt
Euro banknotes
The eurozone has a record of sluggish growth
The eurozone has posted stronger than expected growth for the first three months of the year.

Official figures showed that the region expanded by 0.6% during the first quarter, outstripping the 0.5% pencilled in by forecasters.

The data follows unexpectedly strong growth figures earlier this week from France and Germany, the region's biggest economies.

Analysts said the improvement reflects a better performance by exporters.

A recent recovery in the value of the dollar against the euro after a prolonged decline late last year has made European goods more competitive on global markets.

Flat demand

However, experts warned that with European consumer spending remaining sluggish, it remains doubtful whether a sustainable recovery is under way.

"For a sustained improvement, domestic demand needs to take off too. As such, it is too early to say that this is the start of a strong recovery," commented London-based consultancy Capital Economics.

It added that the eurozone's forecast-beating performance also reflected a steady improvement in global growth, led by the US and China.

The 12-member eurozone has lagged behind in the global growth league during the last three years, failing to match the US' rapid recovery.

The European Commission on Friday said it expected the eurozone to expand by 0.3 - 0.7% between April and June, rising to 0.4 - 0.8% in the July to September period.

The EC expects the eurozone to grow by 1.7% for 2004 as a whole.


SEE ALSO:
Exports rise helps German economy
13 May 04  |  Business
French economy sees strong growth
12 May 04  |  Business
EU calls time on German budget
18 Nov 03  |  Business
France misses deficit deadline
03 Oct 03  |  Business
French budget risks EU wrath
10 Jul 02  |  Business


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