Eurozone economy above pre-crisis peak as growth surges past US, Britain

BRUSSELS/BERLIN: Overcoming years of poor health and crisis, the Eurozone economy grew at its fastest pace in five years in the first quarter, driven by unlikely stars such as France and Spain.

It now stands larger that in did at its peak before the financial crisis, albeit having taken eight years to recover.

The bloc also slipped back into deflation in April.

Blowing past both the U.S. and British economies, the latter weighed down by uncertainty over possibly leaving the Europe Union, Eurozone growth doubled from the previous quarter, beating even the most optimistic expectations on healthy household consumption and a rebound in investments.

But the surge, a welcome relief less than a year after Greece was nearly ejected from the bloc, may be just a blip; Europe is still weighed down by high debt, weak bank profits, high unemployment and vast excess capacity in the economy.

Nonetheless, growth among the 19 countries sharing the euro jumped 0.6 percent on the quarter, well past expectations for 0.4 percent and ahead of Britain´s 0.4 percent.

The U.S. economy grew 0.5 percent on an annualised basis in the first quarter, implying only slightly more than 0.12 percent for the three months.

Annual Eurozone growth held steady at 1.6 percent, more than three times the U.S. rate in the same period.

The numbers defied expectations for a slowdown and were as improved sentiment, plunging energy costs and a slow but steady fall in unemployment and buoyed spending.

"The first months of the year were tumultuous with large stock market declines, growth concerns in the US, China and many emerging markets and plummeting confidence among businesses and consumers," ING economist Bert Colijn said in a note.