European Growth faster than forecasts

European economic growth has exceed growth in the first quarter as the gross domestic product in the 15 euro countries increased by 0.7 percent from the last quarter of 2007.

Germany has seen its strongest growth in over 12 years, which has fuelled the euro region and growth had continued despite the post credit crunch conditions.

The European Union’s statistics office revealed that Germany’s 1.5 percent expansion was double the forecast.

The French economy has also been buoyant in the first-quarter which has helped to offset the Spanish economy which has been battling against the highest levels of inflation for eight years.

Analysts, however, do fear that the current state of growth is unlikely to continue due to both weaker business confidence and a slowdown in orders which is caused by a combination of the strength of the euro against the pound and the dollar, as well as rising energy costs.

So although the euro zone is currently resisting the US downturn, it may soon become affected.

The European Central Bank has decided to freeze interest rates in order to contain inflation which has been running at above the 2 percent ceiling for eight consecutive months.

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