The EU economy grew at 0.6 per cent in the first quarter and by 1.3 per cent year-on-year, as growth in Asia and US fuelled strong demand for European exports. Economists are hesitant that this momentum in growth is sustainable because of weak consumer demand in the EU12 and peaking global growth. Domestic demand may be weakened if oil prices remain high and rising energy costs could add to inflation pressure just as the eurozone recovery appears firmer.

In comparison, US growth figures for the first quarter were five per cent compared to last year, said the EU’s statistical agency, Eurostat. However, the European Central Bank policymakers stated that the data supports their view that a slow recovery was gaining speed and forecast growth of 0.3-0.7 per cent for second quarter 2004 and 0.4-0.8 per cent for the third quarter this year.