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2nd LD Writethru: Eurozone Q1 GDP growth revised up to 0.6 pct

Xinhua, June 7, 2016 Adjust font size:

The eurozone economy grew by 0.6 percent instead of 0.5 percent estimated previously in the first quarter of 2016, the highest rate for 12 months, according to figures issued on Tuesday by the European statistics agency Eurostat.

Eurostat said gross domestic product (GDP) increased by 0.6 percent month-on-month and by 1.7 percent year-on-year.

In its initial "preliminary flash estimate" on April 29,the figures were 0.6 percent and 1.6 percent respectively and then were revised down to 0.5 percent and 1.5 percent on May 13 in its "flash estimate".

The 0.6 percent growth in the first quarter was mainly supported by househode spending and private investment.

Among the components of the GDP of eurozone in the first quarter, household spending was up by 0.6 percent month-on-month, private sector investment grew by 0.8 percent and government expenditure climbed 0.4 percent. Exports and imports moved up respectively 0.4 percent and 0.7 percent.

Analysts said the jump in household spending was partly because of the lower energy prices, which leave consumers with more money to spend on other goods and services.

But the boost from cheap oil is set to gradually fade as energy prices rebound. That means the pace of private consumption growth, the main motor of growth so far, is projected to slow down somewhat next year.

Apart from low oil prices, the relatively low exchange rate of the euro, very ample monetary policy and slightly supportive fiscal policy also continue to underpin the growth this year.

"For the moment, current recovery trends are likely to continue, so steady but not spectacular growth, propped up by very accommodating monetary policy," said Fabian Zuleeg, the chief executive of Brussels-based think tank the European Policy Center.

According to the European Commission's latest economic forecast on May 3, the economy was expected to rise 1.6 percent in the eurozone and 1.8 percent in the EU in 2016, both 0.1 percentage points lower than projected three months ago. Endit