Growth in the eurozone strengthened to a revised 0.6 percent in the first quarter of 2016, official EU data showed Tuesday, but analysts warned the trend would falter later in the year. The Eurostat statistics agency said growth in the 19-nation single-currency bloc accelerated from January to March at a slightly greater pace than the previously estimated 0.5 percent.
This expansion was stronger than the 0.3 percent posted in the two previous quarters in the eurozone and gave it 1.7 percent growth year-on-year. The data compares favorably with the U.S., where gross domestic product (GDP) rose just 0.2 percent from the previous quarter and 2 percent for the 12-month period, Eurostat said. "Today's final estimate confirmed that the economy got off to a strong start to the year, driven by household spending," Jack Allen European Economist at Capital Economics said. "But the economy is unlikely to expand as quickly throughout the rest of this year," he added, citing higher oil prices and a stronger euro as reasons for caution.
That wariness was reflected last week by the German and French central banks, which issued downbeat growth forecasts for the rest of the year. "Global economic uncertainties and problems are still a handicap for eurozone growth," Howard Archer of IHS Global Insight said. "It is also notable that first quarter growth was clearly helped in some countries - notably Germany - by the mild weather helping construction activity," he added. The economies of the 28 EU member countries also grew by 0.5 percent in the first quarter, Eurostat said.