No growth in the Euro area in Q1

Today’s key figure releases showed a somewhat better growth performance for the Euro area as a whole than expected. However, it also underscored that the leading indicators (ZEW) still point to somewhat weaker growth performance in Q2 for the Euro area and that there are huge differences between the core and the periphery with Germany and France doing good and ok, while Italy did not meet expectations.

The Euro-area GDP was unchanged in Q1 compared with Q4 last year. That is somewhat better than expected! (Nordea and consensus: -0.2%).

ZEW expectations dropped to 10.8 in May (Nordea: 15; consensus: 19) from 23.4 in April

Country details:

German GDP rose by 0.5% q/qi in Q1 2012 beating expectations. Growth was driven mainly by the net export and domestic consumption which compensated for a decrease in investments.

French GDP was unchanged q/q in Q1 in line with expectations. Consumer spending contributed positively, while investments had a negative impact. The imports increased and the exports decreased which contributed negatively to the GDP growth. Production of manufactured goods declined.

Italian GDP declined by 0.8% q/q, slightly faster than expectations (consensus: -0.6%)

Portuguese GDP decreased with 0.1 % q/q Q1 which was better than expected. Domestic demand contributed positively whereas the trade balance contribute negatively.

Greek GDP continues to decline. No quarterly growth numbers were released, but GDP dropped 6.2% y/y in Q1.

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