Europe Round Up — Economic Growth Data Takes Center Stage

14:41 GMT

May 2008

(RTTNews) - Thursday, preliminary estimates of first quarter economic growth from the Eurozone grabbed attention. Additionally, inflation data for the region was released during the day.

Euro Zone

The Eurozone economy grew more than expected in the first quarter of 2008, boosted by robust expansion in Germany. A flash estimate from the Eurostat showed that Euro Zone economic growth stood at 2.2% in the first quarter, unchanged from the fourth quarter of 2007. Economists expected the growth to slow to 1.9% in the first quarter. On a quarter-on-quarter basis, GDP rose 0.7%, faster than the 0.4% recorded in the last quarter of 2007. The economy grew more than the 0.5% predicted.

In another report, the Eurostat said annual inflation in the Eurozone fell to 3.3% in April from 3.6% in March. The core annual inflation, which excludes energy, food, alcohol and tobacco stood at 1.6%. Month-on-month, the consumer price index, or CPI rose 0.3% in April.

The latest Survey of Professional Forecasters of the European Central Bank revealed that Euro zone’s average growth forecast for 2008 was revised down to 1.6% from 1.8%. The real GDP growth is seen at 1.6% in 2009, revised down by 0.4 percentage points. The experts hiked average inflation forecast for 2008 to 3% from 2.5%. The survey participants also raised 2009 inflation expectations to 2.2% from 2%.

A preliminary report from the Federal Statistical Office showed that the German economy expanded at a pace of 1.5% quarter-on-quarter in the first quarter after seasonal and calendar adjustments. Economists had expected the economy to grow 0.7%. The price-adjusted GDP was up 1.8% year-on-year in the first quarter. The calendar adjusted annual growth rate was 2.6%.

Separately, the statistical office reported that Germany’s consumer price index rose 2.4% year-on-year in April, slower than 3.1% in March. Month-on-month, the index was down 0.2%. The Harmonized Index of Consumer Prices, or HICP, grew 0.3% month-on-month and 2.6% year-on-year.

Elsewhere, the French statistical office INSEE said the nation’s gross domestic product grew 0.6% quarter-on-quarter in the first three months of 2008. The growth rate rose from 0.3% in the final quarter of 2007. Economists were looking for a growth rate of 0.5% for the first quarter.

In Finland, total output fell 3% in March from the prior year, reversing 5.4% growth in February, Statistics Finland said. However, adjusted for working days, the GDP increased 1% year-on-year. In a separate communiquï¿½, the statistical agency said manufacturing turnover grew 9.9% annually during December to February. According to the Bank of Finland, current account surplus stood at EUR514 million in March. The surplus decreased from February’s balance of EUR1.01 billion.

The Central Bureau of Statistics showed that annual inflation in the Netherlands slowed to 2% in April from 2.2% in March. The HICP rose 1.7% year-on-year. In addition, the statistical office reported that the Dutch economy grew at an annual rate of 3.1% in the first quarter and 0.2% quarter-on-quarter. The Dutch trade surplus decreased by nearly EUR0.6 billion from the previous year to EUR3.6 billion in March.

Austria’s annual inflation slowed to 3.3% in April from 3.5% in March. Month-on-month, the consumer price index rose 0.3%. Elsewhere, the Austrian Institute for Economic Research, or WIFO reported that the nation’s real GDP increased 0.8% quarter-on-quarter in the first quarter, faster than 0.6% in the previous quarter.

The Portuguese GDP grew at a slower pace of 0.9% year-on-year in the first quarter, compared to 1.8% in the fourth quarter the Statistics Portugal said. On a sequential basis, GDP fell 0.2% in the first quarter, reversing a 0.7% growth in the final quarter of 2007. The statistical office separately reported that annual inflation in Portugal stood at 2.5%.

In other news, Cyprus and Greece recorded annual economic growth of 4% and 3.6%, respectively in the first quarter.

Rest of the Europe

In Switzerland, a report from the State Secretariat for Economic Affairs or SECO showed that the consumer sentiment index plunged to plus 2 in the April quarter from plus 14 in January. Economists had expected a reading of plus 10.

In Hungary, industrial production declined 2.6% month-on-month in March on a seasonally and working day adjusted basis, a final report from the statistical office showed. Meanwhile, industrial gross output increased 1.9% year-on-year and the working day adjusted production index grew 4.3%. In the first three months of the year, output rose 6.9% year-on-year.

In Norway, trade surplus increased to NOK37.4 billion in April from NOK26.31 billion in the prior year, the Statistics Norway announced. The trade surplus showed an annual increase of 42.1%.

The Statistical Office of the Slovak Republic reported that HICP climbed at a pace of 3.7% in April. Economists had expected the indicator to stay at 3.6% in April. In a flash estimate, the statistical office noted that Slovakia’s economy expanded 8.7% annually in the first quarter. Economists were looking for an annual increase of 8.5% for the first quarter.

The Czech National Bank said in a report that the current account balance turned to a deficit of CZK0.6 billion in March from a surplus of CZK11.8 billion in February due to deficits on the income balance and the balance of current transfers. Meanwhile, the statistical office reported that the Czech economy grew 5.4% year-on-year in the first quarter of 2008. According to the report, the sequential growth stood at 0.9%.

Norway’s trade surplus increased to NOK37.4 billion in April from NOK26.31 billion in the prior year, the Statistics Norway said.

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