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Eurozone economy grows by 0.7% in Q1

The European Union's statistics bureau Eurostat raised on Thursday its economic forecast for the euro zone, saying the 13-nation economy grew by 0.7% in the Q1 this year, compared to the previous three months.

Year on year, the economic growth rate in the 13-nation bloc sharing the same currency was 3.1%. A previous estimate from Eurostat had put the quarterly rate and yearly rate at 0.6% and 3.0% respectively. As widely expected, the eurozone economy slowed down in the Q1 due to stagnant household consumption, hit by a value-added tax rise in Germany since the beginning of this year.

In the last quarter of 2006, the eurozone economy grew by 0.9% quarter on quarter and 3.3% year on year. Figures showed the eurozone economy was mainly driven by strong investment in the first three months, which grew by 2.4% quarter on quarter. Exports only rose by 0.8% after 3.3% in the fourth quarter of last year, arousing concerns that a strong euro was affecting exports. But the European Commission said recently in a quarterly eurozone report that the ongoing appreciation of the euro may not have significant effect on exports.

In the Q1, Ireland recorded the highest growth rate, which was 4.7%. Both Germany and France registered a quarterly increase of 0.5%. In the 27-nation EU, the growth rate was 0.7% quarter on quarter and 3.3% year on year. Among the main partners of the EU, the US economy grew by 0.2% in the Q1 of 2007 and Japan by 0.8%. (