Quick Bites | Euro-Zone Escapes Recession but Inflation Proves Sticky

The euro zone exited recession as its four top economies drove speedier growth than expected, though the recent retreat in inflation stalled.

First-quarter gross domestic product increased by 0.3% from the previous three months — the strongest pace in 1 1/2 years. A separate release showed consumer prices rose an annual 2.4% in April, matching March’s pace and in line with analyst estimates.

The prospects for the 20-nation bloc are brightening after elevated inflation, rising interest rates and weak global demand sank output. Helping the revival is Germany, which is emerging from a similar malaise led by its industrial sector. June’s likely start of monetary easing by the European Central Bank (ECB) should also provide a shot in the arm. If it happens…

Source: EdgeandOdds.com

Inflation, meanwhile, has been approaching 2%, with officials more confident that it’s on track to meet that target – opening the door for a rate cut in June. They’ve been worrying about sticky services inflation, which eased to 3.7% in April after five months of staying unchanged at 4%.

Core pressures as a whole, which exclude volatile items such as food and energy, also moderated this month — to 2.7% from 2.9%, coming in a touch higher than anticipated.

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