Eurozone GDP accelerates to 0.6% in Q1

Flash estimates from Eurostat

GDP accelerated to 0.6% quarter on quarter both in the euro area and in the EU25 during the first quarter of 2006, according to flash estimates published by Eurostat, the Statistical Office of the European Communities.

For both the eurozone and EU25, growth in the first quarter was faster than Q/Q growth in the fourth quarter of 2005, when the eurozone rose by 0.3% and an the EU25 by 0.4%.

Growth in the EU’s powerhouse, Germany, accelerated from zero in the fourth quarter of 2005 to 0.4% in the first quarter of 2006.

On a year-on-year basis, real GDP growth reached a healthy 2.0% for the eurozone and 2.2% for the EU25 in the first quarter, after 1.8% and 2.0% respectively in the previous quarter.

However, EU growth still lags behind the US, which enjoys, inter alia, faster population growth, implying more consumer demand each year. The US probably also enjoys higher productivity growth, although economists have questioned whether the EU and US figures are strictly comparable in this regard.

During the first quarter of 2006, US GDP increased by 1.2% compared to the previous quarter, after +0.4% in the fourth quarter of 2005. Compared to the first quarter of 2005, GDP grew by 3.5% in the US, after +3.2% in the previous quarter.

The data are called “flash estimates” because the majority of member states (including Cyprus) have not yet submitted data for the first quarter. Nevertheless, they cover in this release 72% of EU25 GDP and related indicators for France.

Simulations and previously published flash estimates have shown the flash estimation procedure to be reliable. Over the last 21 quarters, the flash estimate of GDP growth on the previous quarter for the euro area when compared to the following first regular release has led to an average revision of less than 0.01 percentage points. FM