Bloomberg
The eurozone economy shrank at the start of the year after an unprecedented contraction in Ireland forced a revision to data that originally showed feeble growth.Economic growth in the first three months of the year fell 0.2 percent, Eurostat said yesterday, compared with an earlier estimate of 0.1 percent growth. That is mainly due to a sharp downward restatement of Irish GDP, which slumped 12.1 percent rather than the 2 percent previously measured.While the large number of multinationals based in Ireland often distorts data for the overall eurozone, the huge first-quarter drop makes it even harder to work out where the region’s economy is heading. That complicates the European Central Bank’s (ECB) task in assessing the fallout from the Iran war and calibrating the appropriate monetary policy response.
Irish Prime Minister Micheal Martin speaks at a joint press conference with his Hungarian counterpart, not pictured, at the foreign ministry in Budapest on Thursday.
Excluding Ireland, the bloc’s economy grew 0.2 to 0.3 percent in the period, Bantleon chief economist Daniel Hartmann said.“That is solid growth and is in line with the concept of ‘resilience’ that the ECB has consistently emphasized,” he said. “However, the central bank needs to be cautious. If the conflict in the Middle East isn’t resolved in the coming weeks, growth in the eurozone is likely to slow significantly.”
