The Euro area economy grew 0.4 % during the first quarter of 2015 in line with our expectations. Even if the headline was as expected many countries provided us with surprises. Finland and Greece are still contracting, Italy and France look better than in a long time. A steady growth rather than significant acceleration is expected.
The economic growth in the monetary union did not surprise during the first quarter of 2015. Growth picked up marginally from the rather slow growth of 0.3 % in the last quarter of 2014 and was 0.4 % q/q. This was slightly lower than market expectations.
Even if the we did not get the GDP breakdown for the whole Euro area the countries that have published breakdowns suggest that household consumption still is the main growth driver. This is especially the case in France, where investments declined in the first quarter.
Greece is still performing badly growth being -0.2 %, but the Finnish numbers were almost as bad (-0.1%).
Lower energy prices and a weaker EUR compared to last year are still the main growth drivers. On top of this, fiscal policy is less restrictive and monetary policy is nearly as expansionary as it can be.
"We expect the better growth pace to keep up during Q2, but we do not see space for further acceleration in growth. We will continue to see an uneven growth both between member states and between quarters as growth picks up unevenly," says Nordea Research.
