Euro zone gross domestic product rose by 0.5 per cent in the first quarter of 2001, in line with forecasts, data released by Eurostat today showed.
But analysts said that taken together with industrial production and other recent figures from Germany, the region's largest economy, the data raised concerns for economic prospects in the second quarter and remainder of the year.
Eurostat said that on a year-on-year basis, Q1 GDP was up 2.5 per cent, also in line with forecasts.
The gains followed slightly revised down growth rates in the fourth quarter of respectively 0.6 percent quarter-on-quarter and 2.9 percent year-on-year. Data to the end of 2000 does not include Greece, which joined the euro zone on January 1.
But analysts said the breakdown in the GDP data was worrying as it showed growth was only helped by a positive net trade balance, while domestic demand growth - seen last year as the likely motor for the European economy in 2001 - was flat.
The composition (of GDP) was disappointing. The only thing contributing to growth was net exports, but this was not due so much to higher exports but a sharp fall in imports, said Liesbeth Van de Craen of BBL Asset Management in Brussels.
For the coming quarters it's very difficult to see where an improvement could come from, Van de Craen said, saying BBL on Thursday cut its euro zone growth forecast to 2.0 percent from 2.2 percent.
A weak euro is not much use if there is no one there to buy your goods, she added.