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Disappointing first quarter GDP growth for the eurozone in a multi-speed recovery


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Disappointing first quarter GDP growth for the eurozone in a multi-speed recovery

The eurozone is still struggling with economic growth much weaker than expected in the first three months of this year and wide regional differences.

The economy of the 18 countries that use the euro expanded just 0.2 percent from the previous three months, half the 0.4 percent that experts had predicted.

Click here for more details from Eurostat

A breakdown by country shows a very mixed picture.

Germany – the region’s largest economy posted strong growth – 0.8 percent, in stark contrast to the second biggest France which stagnated.

Italy, which is third largest, contracted, while Spain, the fourth biggest, managed growth of 0.4 percent.

Berlin expects domestic demand to drive growth of 1.8 percent this year.

German Finance Minister Wolfgang Schaeuble says everything points to a broad economic pickup there.

According to the statistics office the positives came exclusively from within Germany, with foreign trade a negative.

France’s economy would have contracted but for government spending and changes to inventories.

Paris’s prediction of 1.0 percent growth for 2014 is looking increasingly unlikely which mean it won’t meet its debt and deficit reduction targets for this year and next.

Italy’s economy had been expected to expand 0.2 percent instead it shrank by 0.1 percent, prompting questions about the sustainability of a fragile recovery begun at the end of last year.

Amid weak industrial orders, low business morale and high unemployment, the strong euro is another problem, holding back growth through downward pressure on import prices and exports.

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