Eurozone GDP growth picks up but inflation falls

Seasonally adjusted GDP rose by 0.6% in the euro area during the first quarter of 2016, compared with the previous quarter, according to EU statistics office Eurostat, while low inflation figures continue to represent a challenge.

While GDP figures appeared stable, with year on year GDP figures increasing by 1.6%, euro area annual inflation dropped from 0% in March to -0.2% in April, reinforcing concerns of deflation across the eurozone.

While falling energy prices continued to remain a key driver of deflationary pressures, price levels of non-energy industrial goods, food, alcohol and tobacco remained stable while price growth for services declined from 1.4% to 1% month on month.

At the same time, unemployment figures across the eurozone improved gradually from 10.4% in February to 10.2% in March. Compared to the previous year, eurozone unemployment fell by 1%.

Among member states, the lowest unemployment rates in March 2016 were recorded in the Czech Republic (4.1%) and Germany (4.2%). The highest unemployment rates were observed in Greece (24.4% in January 2016) and Spain (20.4%).

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