Brussels, May 17, (dpa-AFX/GNA) - The euro area economy logged a steady growth in the first quarter, which was slightly faster than the preliminary estimate, the latest data from Eurostat showed on Tuesday.
Gross domestic product expanded 0.3% sequentially, the same rate as seen in the fourth quarter of 2021. The rate was revised up from the initial estimate of 0.2%.
The currency bloc grew 5.1% from last year, which was slightly faster than the 5% expansion estimated initially. GDP had expanded 4.7% in the fourth quarter.
GDP in the wider EU27 advanced 0.4% from the previous quarter, taking the annual growth to 5.2%. Both rates matched the preliminary estimate published on April 29.
Further, data showed that the number of employed people in the eurozone increased 0.5% from the fourth quarter when employment grew 0.4%. Year-on-year, growth in employment improved to 2.6% from 2.1%.
The labour market is likely to remain a relative bright spot but the expected slowdown in activity this year will act as a headwind, Capital Economics’ economist Jessica Hinds said.
The economist assessed that wage growth is set to accelerate over the coming quarters, keeping the pressure on the European Central Bank (ECB) to normalize its policy stance.
According to the Spring Forecast, published by the EU on Monday, the eurozone economy will grow 2.7% in 2022 and 2.3% next year. But these reflect downward revisions for both 2022 and 2023 from 4% and 2.7%, respectively as Russia’s invasion of Ukraine has posed new challenges.
By exerting further upward pressures on commodity prices, causing renewed supply disruptions and increasing uncertainty, the war is exacerbating pre-existing headwinds to growth, the EU said.
Eurozone inflation outlook for this year was lifted sharply to 6.1% from 3.5%, and that for next year to 2.7% from 1.7%.
GNA