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Warsaw - The eurozone economy grew slightly less than initially estimated in the first quarter, though momentum was still the fastest in a year.
Led by a better-than-forecast performance by Germany, its largest economy, the euro region expanded 0.5% in the three months through March. That compares with an initial estimate of 0.6%.
Expansion in Germany accelerated to 0.7%, the fastest pace in two years, beating the 0.6% estimate in a Bloomberg survey of economists. Italy grew 0.3% and the Dutch economy grew 0.5%.
The Greek economy contracted 0.4% for the same period. The divergence across the bloc highlights the challenge for the European Central Bank to boost uneven growth among the 19 nations and revive inflation.
Germany has benefited from record-low unemployment that has supported consumer demand, while ECB stimulus is helping to drive a cyclical recovery in the eurozone as a whole.
Even so, President Mario Draghi has said the outlook for growth remains “tilted to the downside,” in part because of subdued prospects in emerging markets.
In the first quarter, Germany’s got a boost from stronger consumer and government spending, while mild weather helped construction, the statistics office said.
READ: German economy grows at fastest in two years
Joerg Kraemer, an economist at Commerzbank in Frankfurt, said growth may ease this quarter, though he still raised his forecast for 2016 to 1.5% from 1.%.
“Factors arguing against a significant rise in the underlying growth trend are weak demand from the emerging countries and decreasing tailwind from euro depreciation in 2014,” he said in a note.
Incoming data backs the view that the pace of growth may be slackening. Industrial production slumped in both Germany and the eurozone in March, and business confidence in the country deteriorated last month.
“We expect the pace of growth to slow” to a still “robust” 0.3%, said Johannes Gareis, an economist at Natixis in Frankfurt.
“Growth will be mainly fueled by private and public consumption, reflecting a long list of supporting factors including a steady increase in employment, solid wage gains, low inflation, low interest rates and the refugee impact.”
