Eurozone GDP growth outpaces U.S. at start of year

The economic recovery across the 19-country Eurozone was better than expected in the opening quarter of this year and outpaced that of the United States, official data showed Wednesday.

The gross domestic product (GDP) growth in the single currency grew by 0.5 percent quarter on quarter between January and March, making the annual growth rate to 1.7 percent, according to a preliminary flash estimate published by Eurostat, the bloc's statistics agency.

The better-than-expected performance added to the evidence that Eurozone's recovery has gained momentum, beating that of the United States, whose GDP expanded by 0.7 percent at an annual basis in the first quarter of this year.

Wednesday's data supported the message from earlier national data that the bloc's recovery maintained a decent pace in the first quarter, said Jack Allen, a European economist at the London-based Capital Economics.

Economists said the 0.5-percent quarterly expansion was broadly in line with the rate signalled by surveys such as the Composite Purchasing Managers' Index (PMI) while other activity survey painted a positive picture of sound growth in the second quarter.

However, economist cautioned that the recovery was still generating little inflationary pressure and core inflation in the bloc stayed subdued, which is expected to put pressure on the European Central Bank (ECB)'s stimulus measures.

Allen said that despite the continued healthy growth in the Eurozone economy, they think that the ECB will continue its asset purchases this year as planned. Endit