Euro Doing Better Than Expected
The European Union witnessed a not insignificant amount of economic growth during the first fiscal quarter of 2008. Experts predicted dismal growth for the Euro, in light of the recent slowdown in the global economy. Yet, the vigorous gross domestic product (GDP) figures in European Union countries kept the value of the Euro relatively high, constituting “a last hurrah for the eurozone econonmy,” in the words of economist Nick Kounis.
The 15 European Union nations experienced a GDP growth of 0.7% percent, as compared to the last quarter of 2007. Experts predicted that the countries’ collective GDP would only increase by 0.5%. Those growth numbers add up: the current GDP for the eurozone is 2.2% higher than the GDP at the same time last year.
These growth statistics are all the more meaningful in light of the fact that inflation in the eurozone countries has actually decreased recently from its record-breaking high in March of 2008. Currently, the inflation rate in the eurozone is only 3.3% yearly, as opposed to 3.6% in March.
In Germany, statistics are especially positive. Germany’s economic growth for the first quarter of 2008 was the strongest in over 10 years, according to the country’s Federal Statistics Office. Germany’s GDP growth was twice as high as economists had predicted, at 1.5%. That figure is especially high in light of Germany’s GDP in the first quarter of 2007, when its growth rate measured at only 0.3%.
The GDP of France exceeded analysts’ expectations as well, albeit less spectacularly. The GDP of France showed a growth rate of 0.6% for the first three months of 2008.
Kournis says that the relative power of the Euro, as compared with the economic slowdown in the rest of the world, would cause a slowdown in Europe’s exports. This means that the eurozone will still be affected by the global economy.
