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Euro-area economy failed to gather momentum

May 16, 2014

The euro-area economy failed to gather momentum in the first three months, as France unexpectedly stalled and economies from Italy to the Netherlands shrank. Growth of just 0.2% in the Eurozone, half as much as economists had forecast, adding pressure on the European Central Bank to deliver stimulus measures next month in its battle against weak inflation and anemic output. While German expansion doubled to 0.8%, weakness across the region muted growth perspectives in the currency union. Italy’s economy unexpectedly contracted last quarter, signaling the country’s failure to sustain a pullout from its longest recession on record. Gross domestic product in the three months through March decreased 0.1% from the fourth quarter, when it rose 0.1%, the national statistics institute Istat said in a preliminary report. The decrease contrasts with the median forecast of a 0.2% expansion in a Bloomberg survey. From a year earlier, output shrank 0.5%.

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