The euro area economy expanded in the first quarter after two consecutive declines as all big four economies exhibited better performance, boosting hopes of a sustained recovery this year.

Gross domestic product grew by a faster-than-expected 0.3 percent sequentially following a 0.1 percent fall each in the fourth and third quarters of 2023, preliminary flash estimates from Eurostat showed.

GDP was expected to rise only by 0.1 percent in the first quarter.

Thus the single currency economy recovered from a technical recession that is defined as two consecutive quarters of negative growth.

On a yearly basis, GDP growth accelerated to 0.4 percent from 0.1 percent in the previous quarter. This was also better than the forecast of 0.2 percent.

The German economy grew a more-than-expected 0.2 percent sequentially, in contrast to the revised 0.5 percent decrease in the preceding period.

Underpinned by robust final domestic demand, France’s economic growth doubled to 0.2 percent from 0.1 percent in the fourth quarter.

Italy’s GDP growth accelerated to 0.3 percent from 0.1 percent. This was the third consecutive quarter of expansion.

Spain logged a much faster growth compared to its peers, up 0.7 percent, which was similar to the fourth quarter growth.

Preliminary data showed that economies of other euro countries such as Ireland, Portugal, Belgium and Austria also grew in the first quarter.

ING economist Bert Colijn said the continued modest recovery is putting the currency bloc on track for a better-than-expected growth rate for 2024.

With inflation remaining relatively benign at the moment and unemployment at record lows, the economic environment in the eurozone is looking up, the economist added.

Separate data from Eurostat showed that eurozone harmonized inflation held steady at 2.4 percent in April and matched economists’ expectations.

Core inflation that excludes prices of energy, food, alcohol and tobacco softened to 2.7 percent from 2.9 percent. However, the core rate was slightly above the expected 2.6 percent.

Month-on-month, the harmonized index of consumer prices grew 0.6 percent and core consumer prices rose 0.7 percent in April.

The European Central Bank is widely expected to lower interest rates in the next policy session in June as inflation is projected to start its return to the 2 percent target in the coming months.