Euro zone growth up 1.3 per cent for 1st quarter

Growth in the 12-nation euro zone rose less than expected in the first quarter of 2005 as the EU's statistics agency today revised…

Growth in the 12-nation euro zone rose less than expected in the first quarter of 2005 as the EU's statistics agency today revised down its estimate to a 1.3 per cent annual rise in gross domestic product.

Eurostat had previously estimated first quarter growth of 1.4 per cent year-on-year. Quarterly growth was unrevised at 0.5 per cent.

Separately, the EU executive Commission cut its growth forecast for second quarter for the second time by 0.1 percentage point to 0.1-0.5 per cent in the April-June period but retained a 0.2-0.6 per cent estimate for the third quarter.

First quarter growth in the euro zone compares against a 0.9 per cent quarterly GDP growth in the United States for an annual rise of 3.7 per cent. Japan 's GDP grew 1.3 per cent on a quarterly basis and 0.8 per cent year-on-year.

READ MORE

Growth in the euro zone has been hampered by weakening consumer and business confidence, stemming from high oil prices, a strong euro and high unemployment.

Eurostat said euro zone and unemployment was unchanged at 8.9 per cent in April for the third month in a row, stuck around that level since late 2003. The April unemployment rate was the same for the whole EU of 25 member states.

Eurostat also confirmed the quarterly GDP growth of 0.5 per cent in whole European Union of 25 member states in the first three months of this year, and revised down the year-on-year figure to 1.6 percent from 1.7 per cent.

It also revised down the annual rate of growth in the fourth quarter of 2004 to 1.5 per cent compared with an earlier estimate of 1.6 per cent. The quarterly growth rate was unrevised at a meagre 0.2 per cent.

Eurostat said private consumption growth in the euro zone halved to 0.3 per cent in the first quarter against the previous three months, investment fell by 0.7 per cent while exports rose 0.2 per cent and imports dropped 1.1 per cent.