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Eurozone economy slows in first quarter

Friday, 4 May, 2018 - 17:08

The economy in the euro area slowed in the first quarter of 2018. At the same time, the unemployment rate remained stable at 8.5 percent.

After rising 0.7 percent in the fourth quarter of 2017, growth in the euro area slowed to 0.4 percent in the first quarter of 2018

In comparison with the same quarter of the previous year, GDP grew by 2.5 percent in the euro area and by 2.4 percent in the EU in the first three months of 2018.

One of the reasons for this slowdown was the decline in the manufacturing industry for the fourth consecutive month in April.

In addition, since the beginning of the year, the euro has appreciated against the dollar reaching a peak of nearly 5 percent in February, which increases export prices.

Separate figures released by Eurostat showed that retail sales rose by just 0.1 percent in March. This equated to an annual increase of 0.8 percent and signified a slowdown since February, which saw growth of 0.3 percent in the month and 1.8 percent year-on-year.

The fall in retail sales was mainly due to a decline in spending on non-food items, especially clothing and pharmaceutical goods.

Spending on food and drink increased slightly, while online shopping showed a growth rate of 3.3 percent.

On a country-by-country basis, retail sales fell most in Ireland and Germany, while Latvia, Portugal and Austria posted sharp increase in March.

According to Eurostat, unemployment remained stable at 8.5 percent in March with over 17 million jobseekers. A figure still at its lowest since December 2008. “Compared to February 2018, the number of unemployed decreased by 94,000 in the EU28 and 83,000 in the euro area,” said Eurostat.



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