Euro zone economy accelerates, but prices fall more than expected
Published 29/04/2016 | 11:29
The euro zone economy accelerated more than expected in the first quarter, preliminary data showed on Friday, but consumer prices also dropped by more than forecast in April because of a steep fall in energy costs.
The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.6 percent quarter-on-quarter in the January-March period, up from 0.3 percent growth in the previous three months.
Economic polled by Reuters had expected quarterly growth of 0.4 percent. On a year-on-year basis, euro zone GDP rose 1.6 percent in the first quarter, beating expectations of a 1.4 percent increase.
Eurostat does not provide a detailed breakdown of the numbers in its first GDP estimate.
Meanwhile, consumer prices fell 0.2 percent year-on-year in April, Eurostat said, after holding flat in March, a steeper drop than the consensus forecast for a 0.1 percent decline.
Falling energy prices, which tumbled 8.6 percent year-on-year in April, were the main drag on the overall index, while unprocessed food was the main positive, rising 1.2 percent.
Without those two most volatile items, in a measure that the European Central Bank calls core inflation -- consumer prices rose 0.8 percent year-on-year in April, less than the 1 percent increase in March.
The ECB wants to keep headline inflation below, but close to 2 percent over the medium term and has been buying government bonds on the market since last year to inject more cash into the economy and make prices grow faster.