Reform laggards hold back eurozone growth - Quickview by European Economist Azad Zangan

In summary:

• First quarter eurozone GDP is estimated to have grown by 0.2% (quarter-on-quarter) matching quarterly growth at the end of 2013 but disappointing the City, where consensus expectations were for an acceleration to 0.4% growth.
• The main drivers of the disappointment came from France, Italy and the Netherlands - all of which continue to struggle with ongoing austerity and structural reforms.
• Looking ahead, leading indicators suggest eurozone growth should accelerate over this year, but that Germany is likely to be the key driver, while France continues to struggle.
• We continue to expect a cut in the main refinancing rate at the June meeting (to 0.1%), but no cuts to the deposit rate, nor the introduction of quantitative easing.