Eurozone economy gets strong start in 2017

[BRUSSELS] Growth in the eurozone remained resilient in the first quarter of 2017 as the economy continued to brush off the unknowns of Brexit and a high stakes election in France, data showed on Wednesday.

The fresh data lent credence to a survey last month suggesting the eurozone economy is growing at its fastest pace since it emerged from the worst of the financial crisis six years ago.

The economy "is proving to be resilient to uncertainty both abroad and at home. Bar a surprise at the French elections on Sunday, eurozone growth is set for a strong 2017," said ING economist Bert Colijn.

The EU's Eurostat statistics agency said growth in the eurozone landed at 0.5 per cent in the first quarter of 2017, the same as the previous quarter and on par with analyst forecasts.

The eurozone economy has seen a steady period of growth, expanding by 1.7 per cent in 2016.

That was faster than the United States' growth rate of 1.6 per cent last year.

The IMF forecasts that the eurozone will maintain the healthy pace in 2017 with annual growth of 1.7 per cent.

Spain was a solid performer in the period from January to March, growing by 0.8 per cent as the country continues to recover from a damaging crisis marked by sky-high unemployment.

But economic growth in France slowed in the first quarter to 0.3 per cent just before the country chooses its next president in an election where the economy is taking centre stage.

Still, the overall figure for the eurozone shows that recovery in Europe remains on track, despite the significant political uncertainties in Europe, including Britain's divorce from the EU.

"In a year beset with serious political risks, the economy got off to an encouraging start," said Florian Hense, economist at Berenberg Bank.

"With major uncertainties from elections this year out of the way (Wilders in Netherlands) or - hopefully - receding (Le Pen in France, early elections in Italy), the upswing is poised to maintain its current momentum or even gain further traction in the quarters to come," he said.

The sustained growth will put pressure on the European Central Bank to scale back its controversial stimulus measures.

The ECB, led by its chief Mario Draghi, is at pains to stress that, despite the series of positive economic signals, it may be too soon to pull back on the programme.

AFP