A pick-up in Irish growth pushed activity in the euro-zone to double-expected for the first three months of the year.
A 10.8 per cent increase in Ireland’s gross domestic product (GDP) compared to the last three months of 2021 resulted in growth of 0.6 per cent in the 19-member euro-zone and 0.7 per cent in the EU.
It comes less than a month after EU statisticians predicted quarterly growth of 0.3 percent in the euro zone and 0.4 percent in the EU.
According to the EU’s statistics agency, the increase in GDP is due to increases in inventories and external accounts, while spending in the 19-member euro zone and the 27-member EU fell.
Household spending fell 0.7 percent in the euro area and 0.5 percent in the EU after contracting in the previous three months.
Government spending fell 0.3 percent in both zones in the first quarter.
Exports also edged up 0.4 percent in both zones after nearly 3 percent growth at the end of 2021, while imports fell.
The war in Ukraine broke out at the very end of the quarter when Russia invaded on February 24th. Eurozone economies also continued to experience the ongoing spread of the Omicron coronavirus.
The revision to the numbers is “unusual” according to a note from Bloomberg Economics, but “the large contribution from inventories and volatile growth in Ireland mean the data should not be taken as a sign of resilience”.
Excluding Ireland, eurozone GDP growth would have slowed to 0.3 percent in the first quarter, from 0.5 percent in the last three months of 2021.
Data from Ireland’s national accounts released last week shows that the increase is almost entirely due to exports, which are concentrated in the multinational sector.
Modified domestic demand, which focuses on economic activity, contracted by one point in the first quarter of this year compared to the final quarter of 2021. Consumer and government spending also fell, and construction spending fell sharply.
Other eurozone countries saw near-zero growth in the first quarter of 2022, with activity up 0.1 percent in Italy, 0.2 percent in Germany and 0.3 percent in Spain compared to the last quarter of 2021.
Growth slowed to zero in the Netherlands and contracted 0.2 percent in France.
The only countries with growth above 2 percent were Romania (5.2 percent), Latvia (3.6 percent), Croatia (2.7 percent), Portugal (2.6 percent), Poland (2.5 percent) , Greece (+2.3 percent) and Hungary (2.1 percent). ).
The Organization for Economic Co-operation and Development (OECD) is forecasting a major hit to the eurozone economy this year as a result of the war in Ukraine.
Eurozone growth is expected to slow to 2.6 percent this year and 1.6 percent in 2023, with the European Central Bank expected to hike interest rates this summer as inflation soars higher.
“Countries around the world are being hit by higher commodity prices, adding to inflationary pressures and dampening real incomes and spending, dampening the recovery,” said OECD Secretary-General Mathias Cormann.
“This slowdown is a direct result of Russia’s unprovoked and unjustifiable war of aggression, which is resulting in lower real incomes, slower growth and fewer job opportunities around the world.”
https://www.independent.ie/business/world/irish-export-numbers-lifted-eurozone-growth-higher-than-expected-in-the-first-quarter-41733420.html Irish export figures pushed euro zone growth faster than expected in the first quarter