Eurozone Economy Grows by 5.4% in Q1 of 2022- Eurostat

The European Union's statistics office "Eurostat" said on Wednesday that the eurozone economy grew faster in the first quarter of the year than in the previous three months despite the impact of the war in Ukraine, revising its previous estimates sharply higher.

Eurozone employment growth was also revised upwards, to show a further acceleration in the January-March period compared to the previous quarter.

In its final reading for the January-March period, Eurostat said that the gross domestic product of the 19 countries that share the euro rose 0.6% on a quarterly basis, expanding by 5.4% on an annual basis.

The numbers were largely revised upwards from previous estimates released in mid-May, when Eurostat estimated quarterly growth in the eurozone at 0.3% and an annualized expansion of 5.1%.

Final data shows growth in the eurozone picked up rapidly in Q4 of 2021, despite Russia's operation in Ukraine, which disrupted supply chains, damaged confidence and sent energy prices soaring. However, the negative effects of the war are expected to appear in the second quarter.

Data showed that growth in the eurozone slowed significantly in the fourth quarter of 2021 to 0.2% from the 2.3% quarterly expansion in the third quarter. Better-than-expected growth in the first quarter was driven by higher exports and inventories, which more than offset the decline in government spending and consumer purchases.

Economic growth has been very strong in smaller countries, with Ireland posting an excellent quarterly growth of 10.8%.

Among the bloc's largest economies, GDP grew by 0.2% in Germany and 0.1% in Italy, while declining by 0.2% in France.

Eurostat said employment growth In Q1 recorded 0.6% quarter-on-quarter and 2.9% year-on-year, revising its previous estimates of 0.5% and 2.6%, respectively. Employment growth also accelerated from the previous quarter, when it was 0.4% quarterly and 2.1% over the year.