The GDP data follow a May 10-11 meeting of Group of Seven finance ministers in England, who concluded that “growth prospects remain uneven and we can’t take the global recovery for granted,” according to U.K. Chancellor of the Exchequer George Osborne, who chaired the gathering.
In China, fixed-asset investment unexpectedly decelerated last month, the National Bureau of Statistics said in Beijing today, and industrial output trailed estimates, adding to concerns that the world’s second-largest economy will fail to show much of a recovery this quarter.
On the eve of the G-7 meeting of finance ministers, U.S. Treasury Secretary Jacob J. Lew said European policy makers are still falling short in efforts to revive their economy, calling for “the right balance” between austerity and growth.
With the region’s slump spreading to France and Germany in the fourth quarter, when both economies suffered a contraction, officials have acknowledged a need to soften the fiscal squeeze.
“If we would have too much adjustment, what would it mean?” French Finance Minister Pierre Moscovici said in a Bloomberg Television interview with Francine Lacqua after the G- 7 talks. “It would mean that our economy would be in recession, and we cannot accept that.”
France’s economy probably did succumb to a renewed recession in the first quarter with a contraction of 0.1%, according to the median forecast of 25 economists in a Bloomberg survey. Still, business sentiment for April published by the Bank of France today unexpectedly rose to 94 from 93 in March.
In Italy, GDP probably fell for a seventh successive quarter, dropping 0.4%, the median of 21 forecasts shows.
Germany’s economy, the region’s biggest, may have escaped the recession affecting its neighbors with growth of 0.3%, according to another survey of 41 economists.
With the euro area’s economic slump persisting and the annual inflation rate dropping to 1.2% in April, the ECB on May 2 reduced its key interest rate to a record low of 0.5% and signaled it stands ready for further action if the outlook doesn’t improve.