By FocusEconomics
BARCELONA, Spain – The economy expanded 0.3 percent in seasonally adjusted quarter-on-quarter terms in Q1 2024. This followed Q4 2023’s 0.1 percent dip and beat market expectations of a 0.2 percent increase. Compared with Q1 2023, seasonally adjusted GDP increased by 0.4 percent year on year in Q1, following 0.1 percent growth in the previous quarter.
The quarterly increase reflected broad-based expansions in the Eurozone’s largest economies. Germany’s GDP rose 0.2 percent over the previous quarter in Q4, as did the French economy. Moreover, Italy’s economy expanded 0.3 percent, while Spanish GDP grew 0.7 percent.
This year, GDP is likely to expand at a soft pace. The industrial sector should rebound thanks to improved external demand. The disbursement of EU funds should support activity, however. Higher-than-expected debt-servicing costs for highly indebted Mediterranean governments due to increased financial and geopolitical instability pose a downside risk to the outlook.
Commenting on the outlook, Bert Colijn, senior Eurozone economist at ING, stated:
“After today’s encouraging GDP data for 1Q, the continued modest recovery is putting the eurozone on track for a better-than-expected growth rate for 2024. With inflation remaining relatively benign at the moment and unemployment at record lows, the economic environment in the eurozone is looking up.”
