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German economic strength supports eurozone growth

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By Euronews  with REUTERS
German economic strength supports eurozone growth

<p>Germany’s economy performed much better than expected in the first three months of this year, making it again the driving force for the eurozone.</p> <p>Private consumption was the most important element.</p> <p>Record-low unemployment, low interest rates and higher wages meant freer spending which more than offset a dip in foreign trade.</p> <p>However the economy ministry in Berlin said it expects German growth to slow due to weaker exports.</p> <p>For the eurozone as a whole the latest estimate showed growth at 0.5 percent from the previous three months. </p> <p>For the two largest economies – Germany hit 0.7 percent – the fastest pace in two years – and <a href="http://www.reuters.com/article/us-france-economy-idUSKCN0Y10IP">France saw a surprisingly strong 0.5 percent</a>, as did the Netherlands. </p> <p><strong>Italy</strong></p> <p>The region’s third biggest economy – Italy – managed a modest 0.3 percent which was broadly in line with expectations. </p> <p>Solid domestic demand supported Italian <span class="caps">GDP</span> between January and March with industry and services contributing even as agriculture contracted.</p> <p>Trade was a drag on growth, with exports outstripped by imports. </p> <p><strong>Greece</strong></p> <p>Greece’s economy shrank 0.4 percent in the first quarter compared with the final three months of 2015. <span class="caps">GDP</span> was down by 1.3 percent from the same period a year ago.</p> <p>“The result is in line with our expectations and reflects a relative weakening in private consumption due to uncertainty over the conclusion of the bailout review,” said National Bank economist Nikos Magginas.</p> <p>The EU Commission expects the economy to contract by 0.3 percent this year, but some economists are hopeful it could return to growth in the second half of the year.</p>