Eurozone GDP growth slows in Q1

BRUSSELS - The eurozone economic growth slowed in the first quarter of 2018 as expected, while economists said some temporary factors help explain the slowdown and surveys suggested that growth will pick back up.

Seasonally adjusted Gross Domestic Product (GDP) of the euro area rose by 0.4 percent in the first quarter quarter-on-quarter, slower than the growth rate of 0.7 percent in the previous month, according to a preliminary flash estimate published by Eurostat, the European Union's statistical agency.

"Temporary factors help to explain the slowdown in euro-zone GDP growth in Q1 and surveys suggest that growth will pick back up," said Stephen Brown, the European economist from Capitale Eonomics.

Brown said temporary factors, including unseasonably-cold weather, striking workers, short-term bottlenecks and even an outbreak of the flu, appear to have weighed on GDP growth in Q1.

But there is no denying that underlying growth has slowed as last year's boost from net trade has faded. Given the high level of consumer confidence, the economist suspects that consumption growth will pick up in Q2 and help to push quarterly GDP growth back to around 0.5 percent or 0.6 percent.

"This underscores our forecast for annual growth to slow only slightly this year from 2017's 2.4 percent to 2.3 percent," said Brown.

Eurostat figure showed that eurozone GDP rose by 2.5 percent in first quarter compared with the same quarter of 2017, also slowed down from the rate of 2.8 percent in the previous quarter.