Eurozone growth edges higher

BRUSSELS, Belgium -- The eurozone economy expanded only slightly in the first quarter of this year due to a slower than expected recovery within the 12-nation group.

Gross domestic product grew by 0.2 percent from January to March, compared to the previous quarter, and expanded by 0.1 percent from a year earlier, Eurostat said on Thursday.

Economists polled by Reuters had expected GDP to rise by 0.3 percent on a quarterly basis and by 0.4 percent year-on-year.

Eurostat said first quarter expansion was helped by a jump in exports, but said it had revised its outlook for the second quarter because growth prospects are weaker than originally forecast.

It now expects growth of between 0.3 percent and 0.6 percent in the second quarter compared with the previous three months, down from growth of between 0.4 percent and 0.7 percent.

Eurostat revised downwards its growth estimate for the fourth quarter of 2001. It said the economy contracted by 0.3 percent in the quarter, compared to an initial estimate of a 0.2 percent contraction. Year-on-year, eurozone growth totaled 0.3 percent in the last quarter of 2001, compared to a previous forecast of 0.6 percent.

Meanwhile, the European Commission said it expected growth to accelerate in the third quarter of this year as the global economic environment improves.

It forecast eurozone growth of between 0.7 percent and 1.0 percent in the quarter.