Eurozone Growth Slows To 3.1%

Decline due to Germany's increased VAT tax.

Economic growth in the 13 nation eurozone slowed only marginally in the first quarter to 3.1% over 12 months, the EU's Eurostat data agency said July 12. The rate marked a slight dip from the final three months of 2006 when the combined economy of the countries sharing the euro grew 3.%, the fastest growth in six years.

On a quarterly basis, growth in the eight-trillion-euro (US$ 11 trillion) economy eased to 0.7% in the first quarter after hitting 0.9% in the final quarter of 2006, Eurostat said, revising an estimate of 0.6%.

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.

Meanwhile, growth also lost pace slightly in the 27 nation EU in the first quarter, easing to 0.7% over one quarter and 3.3% over one year. The EU finished the last three months of 2006 with growth of 0.7% over one quarter and 3.3% over one year.

Copyright Agence France-Presse, 2007

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