GDP y/y: 2.2%, advance 2.2%, pr. 2.2%

The Euro-zone economy grew 0.8% in the 1st quarter, compared to an earlier estimate of 0.7%. Despite a difficult environment including a higher Euro, record oil prices and turmoil in financial markets, the Euro-zone was still able to have a relatively strong quarter. The 4th quarter figures were revised down to a growth rate of 0.3% from 0.4%. GDP growth was led by investment spending which was up 1.6% for the first 3 months of the month. Exports were up 1.9%, while imports increased 1.8%. Germany's economy grew in the 1st quarter at the fastest pace in 12 years, as a mild winter helped boost construction spending.

Expectations are for weaker performance from Germany and the Euro-zone as the factors laid out earlier are starting to dent manufacturing, the services sector and consumer confidence. That implies that the strong growth of the 1st quarter will not be repeated in the 2nd quarter. The slowdown does not appear to be as pronounced as it was in the US, and the ECB will be able to maintain its current policy of holding interest rates steady in order to combat high inflation.  

From the Release: "During the first quarter of 2008, household final consumption expenditure increased by 0.2% in the euro area (after -0.1% in the previous quarter). Investments grew by 1.6% (after +1.0%). Exports rose by 1.9% (after +0.3%). Imports increased by 1.8%(after -0.3%)." 

GDP y/y: 2.2%, forecast 1.9%, pr. 2.2%

Strong expansion in Germany helped the Euro-zone post 1st quarter results that were better than anticipated. Growth was up 0.7% compared to the 4th quarter. The data helps support the stance of the ECB, which has kept rates at a 6-year high of 4% in order to combat inflation, even as some call for cuts in order to bolster growth. More recent data however, suggests that the momentum the German economy has experienced may be fading, and a decline in foreign demand may weakened growth in the 2nd quarter. Tighter credit condition may hurt investment and consumer spending while a strong Euro will most likely crimp export growth. Therefore the 2nd quarter numbers should fall below trend growth rates.

Germany saw its first quarter GDP rise 1.5%, a 12 year high; France saw faster-than-expected growth, increasing 0.6%, while Spain slowed to 0.3% from 0.8%.

Revised release for 4rd Quarter
Provided by: EuroStat
Official Release: PDF

GDP y/y: 2.2%, forecast 2.2%, prel. 2.2%

European economic growth cooled in the last three months of 2007. With the ECB's reluctant to move to lower rates, credit conditions remain tight limiting economic activity. Also, the Euro's recent climb is cutting into export growth. The 3rd quarter saw growth of 0.7%. Consumer spending fell for the first time in 6 years, declining 0.1%. It had increased 0.5% in the 3rd quarter. Exports slowed to an increase of 0.6% from the 3rd quarter's 2% increase. Government spending also slipped by 0.1%. 

Whereas the US and UK showed early signs of slowdown, the Euro-zone economies have seen a growth in the region's service and manufacturing industries slow, while consumer and executive confidence fell last month to the lowest in more than 2 years.

Revised Release for 4rd Quarter
Provided by: EuroStat

GDP y/y: 2.2% forecast 2.3%, pr. 2.3%

Growth in the Euro-zone cooled in the fourth quarter. The Euro's climb against the greenback has caused European exports to be less attractive thereby causing companies to scale back on investments. Consumer spending fell for the first time in six years. A strong labor market has been a bright spot, but with decrease in investments, this is not likely to perpetuate by itself. There are similarities with the issue the ECB and the Fed have to deal with. For now, the ECB is slightly more concerned with inflation. The bank will meet Thursday, as the market is expecting a decision to hold rates.

Preliminary release for 4rd Quarter
Provided by: EuroStat
Official Release: PDF

GDP y/y: 2.3%, 2.2%, pr. 2.7%

"GDP grew by 0.4% in the euro area1 (EA13) and by 0.5% in the EU271 during the fourth quarter of 2007,
compared with the previous quarter, according to flash estimates published by Eurostat, the Statistical Office of the European Communities. In the third quarter of 2007, growth rates were +0.8% in both the euro area and the EU27.

Compared with the same quarter of the previous year, seasonally adjusted GDP grew by 2.3% in the euro area and by 2.6% in the EU27 in the fourth quarter of 2007, after +2.7% and +3.0% respectively in the previous quarter. During the fourth quarter of 2007, US GDP increased by 0.2% compared with the previous quarter, after +1.2% in the third quarter. In Japan, GDP grew by 0.9% in the fourth quarter, after +0.3% in the third quarter. Compared with the same quarter of the previous year, GDP grew in the fourth quarter by 2.5% in the US and by 1.8% in Japan, after +2.8% and +1.9% respectively in the previous quarter.

Over the whole year2 2007, GDP grew by 2.7% in the euro area and by 2.9% in the EU27."