June 02, 2007	Saturday	Jamadi-ul-Awwal 16, 1428

BRUSSELS, June 1: The 13-nation eurozone economy is set for brisk growth this year despite losing some pace in the first three months, official data showed on Friday as unemployment fell to a record low point.

After finishing 2006 with the fastest growth in six years, the combined economy of the countries sharing the euro slowed in the first quarter to 3.0 per cent over 12 months, the EU’s Eurostat data agency said.

The rate, which was revised down from a first estimate of 3.1 per cent, marked a slight slowdown from the final three months of 2006 when the eight-trillion-euro economy grew by 3.3 per cent.

On a quarterly basis, growth in the eurozone economy eased to 0.6 per cent in the first quarter after hitting 0.9 per cent in the final quarter of 2006, Eurostat said.

The data, adjusted for seasonal variations, were roughly in line with private economists’ forecasts that the eurozone economy grew 0.6 per cent in the first three months and 3.1 per cent over one year.

Meanwhile, growth also cooled in the 27-nation EU in the first quarter, easing to 0.6pc over one quarter and 3.2pc over one year.

Growth was widely expected to slow slightly at the beginning of the year as consumers in Germany, the biggest economy in Europe, were hit with a full three percentage point increase in value added or sales tax.

“Eurozone growth was resilient in the first quarter, particularly given the sales tax hike in Germany, benefiting from impressively strong investment,” said economist Howard Archer at consultancy Global Insight.

Eurostat’s second snapshot of the European economy at the beginning of the year showed a slight decline of 0.1 per cent in eurozone household spending in the first quarter, following growth of 0.4 per cent at the end of 2006.Although household spending was weak in the first quarter, businesses kept pumping more money into new investments, which jumped 2.5 per cent from 1.5 per cent in the last quarter of 2006.

Looking ahead, the European Commission forecast that the eurozone growth would remain steady over the course of the rest of the year.

It projected the economy would grow in a range of 0.4-0.8 per cent in both the second and third quarters and 0.2-0.8pc in the final three months of the year.

“Latest eurozone data and survey evidence remain relatively upbeat, suggesting that above-trend growth is continuing,” Archer said.

“Indeed, the further decline in eurozone unemployment in May to a record low should be supportive for consumer spending, which has so far been the softest link in the region’s growth story,” he added.—AFP