The Eurozone economy grew 0.4% in the first quarter of 2019, almost double the 0.2% growth recorded in the final quarter of 2018, according to Knight Frank‘s -Eurozone Economy – May 2019 report.
Year-on-year growth stood at 1.2%, slightly above the market expectation of 1.1%.The improved growth performance suggests that both Germany and Italy performed better in the first quarter of this year, following a contraction in H2 2018. France economy grew +0.3%, Spain +0.7% and Italy +0.2% in the first quarter of 2019.
”These estimates may ease concerns about an imminent recession in Europe, yet the sustainability of this upturn remains to be seen.” said in report.
Industrial production in February has seen the worst decline in activity since November 2018, falling 0.2% month-on-month and 0.3% year-on-year. These drops were driven by a decline in energy production (-3.0% m-o-m; -5.9% y-o-y).
Among the largest economies in the currency bloc, German industrial output declined the most in February; down -2.0% compared with -2.8% in February 2018. Spain followed with a -0.4% decline (+3.1% a year ago). Meanwhile, Italy noted a +0.9% growth in production, following the -0.8% contraction this time last year. On a monthly basis, Spain and Germany recorded the biggest output declines with -1.1% and -0.4% respectively. Italy (+0.8%) and France (+0.4%) observed gains in output.
Consumers continue to support the domestic economy in the Eurozone as retail trade remains buoyant with trade volumes up +2.8% y-o-y and +0.4% m-o-m in February 2019, led by non-food products. Germany (+4.5% y-o-y) was one of the top performers among the larger economies. This data suggests resilience in the euro area domestic economy amid talk of a slowdown.
Annual inflation rate remained at 1.4% in March 2019, unchanged from a year earlier and 0.1 percentage points lower than February 2019.
The report reveals that unemployment rate reached the lowest level since the global financial crisis, dropped to 7.7%in March 2019, down from February 2019 and from 8.5% in March 2018. Germany again led with the lowest level of unemployment at 3.1%.
The 10-year Eurozone government bond yield dropped to 0.84% in March 2019 from 0.95% in February 2019 and from 1.07% in March 2018.
” We expect the German economy to buoy over 2019, thus underscoring its attraction as an investment destination for investors looking to the euro area.”
”Better than expected performance in Germany is implying that domestic demand may be slowly returning. This tallies with German government forecasts, which expect GDP to perk up in 2020, with growth increasing to 1.6% per annum. As outlined in our Germany report, we expect the German economy to buoy over 2019, thus underscoring its attraction as an investment destination for investors looking to the euro area.”Knight Frank said.