World Economy

Europe Growth Loses Thrust in Risk for Global Expansion

Europe Growth Loses Thrust in Risk for Global ExpansionEurope Growth Loses Thrust in Risk for Global Expansion

Europe’s economy lost momentum in the first quarter as expansions slowed from France to the UK, threatening to undermine the global growth the continent previously helped power.

Figures from across the region pointed to a softer trend in the early part of the year, and US first-quarter data due shortly is also set to show activity weakening. The world’s largest economy is forecast to have grown an annualized 2%, a step down from the pace seen through 2017, Bloomberg reported.

The latest numbers in Europe included a slump in French economic growth and a stabilization in euroland sentiment after three straight declines. In the UK, the economy came to a near halt, putting in its worst performance in more than five years.

While the slowdown is partly due to winter storms that ripped through the region, the European Central Bank acknowledged the downward shift on Thursday. If it persists, it could increase caution among policy makers about their plans to pare back stimulus later this year. A similar story has emerged in the UK, where the weak data prompted investors to slash bets on an interest-rate increase in May.

The disruptive weather also probably played a part in the performance of the whole euroland, where expansion is forecast to have cooled to 0.4% in the three months through March. In April, economic sentiment for the euro region stabilized, though a business indicator fell to an eight-month low.

Meanwhile, Spain's economy expanded at a steady pace in the first quarter, flash estimate from the statistical office INE showed Friday, RTT reported.

Gross domestic product grew 0.7% sequentially in the first quarter, the same pace as seen in the fourth and third quarters of 2017. The rate came in line with expectations.

Year-on-year, the economic growth slowed to 2.9% from 3.1% a quarter ago. A similar slower pace was last seen in the first quarter of 2015.

Flash estimate from INE showed that consumer price inflation eased to 1.1% in April from 1.2% in March. Economists had forecast the rate to remain stable at 1.2%. Inflation based on the harmonized index of consumer prices, also came in at 1.1% versus 1.3% in March. The rate was forecast to ease slightly to 1.2%.

Month-on-month, consumer prices rose 0.8% in April, slower than the 1% increase a year ago.

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