Preliminary data from Eurostat released earlier this week showed that the pace of economic output expanded 0.5% on a quarterly basis in the three months ending March 2017, beating estimates of 0.4%.
The flash estimates confirmed the various business confidence surveys that suggested that growth in the euro area continued to push higher amid what seems to be a strengthening recovery in the economy, despite political headwinds such as the French and soon to come, German elections.
At the current pace, forecasts are tipped to show that growth in the euro area could rise as much as 1.5% this year.
Real GDP growth in the euro area stands at 3%, marking a pre-crisis level with the carry over effect putting 2017 real GDP growth at 1.1%.
The flash estimates come on the back of published GDP figures from six regional economies which include Spain and France but exclude German GDP growth.
Germany will be publishing the quarterly GDP figures next week.
A pick up in domestic demand is seen as one of the major factors contributing to the GDP expansion. The shared currency was muted to the news and failed to hold on to the gains against a strong U.S. dollar which strengthened on the back of the FOMC meeting where interest rate expectations for June remain strong.
Read more: https://www.orbex.com/blog/2017/05/euro-area-first-quarter-gdp-growth-rises-0-5/