The eurozone economy grew by 3.0 percent from twelve months ago in the first quarter this year, slower than in the previous quarter, the European Union's statistics bureau Eurostat said on Friday.

The year-on-year growth rate in the 13-nation bloc sharing the same currency was 3.3 percent in the fourth quarter of 2006, when last year saw the fastest expansion in six years.

On quarterly basis, the eurozone economic growth eased to 0.6 percent in the first quarter after hitting 0.9 percent in the final quarter of last year, the Eurostat said.

The growth was mainly driven by strong investment. Compared with the previous quarter, eurozone investments rose by 2.5 percent in the first three months this year. Exports and imports increased by 0.3 percent and 1.6 percent respectively, while household final consumption expenditure decreased by 0.1 percent.

The combined economy of 27 EU member states also slowed down in the first quarter to 3.2 percent year-on-year. It was 3.5 percent in the previous quarter. Quarter-on-quarter, the EU economy grew by 0.6 percent, down from 0.9 percent in the fourth quarter of last year.

The slow-down was widely expected at the beginning of this year as a value-added tax rise of three percentage points was introduced in Germany, which brought down consumption in the European largest economy.

In the first quarter of 2007, economic growth in Germany cooled to an annual rate of 3.6 percent from 3.9 percent in the previous quarter. France and Britain, the other two major economies in the EU, also slowed down slightly.

Despite slow-down, analysts said both the eurozone and EU economies are set to rebound later this year, as Germany's rapid recovery from tax rise has already beaten expectations.

European economy started this year at a faster pace than the United States and Japan, the other two major economies. On yearly basis, the U.S. economy increased by 1.9 percent in the first quarter, and Japan 2.2 percent.

The European Commission last month raised its economic forecasts for both the euro zone and the EU, due to a boost in investment and household spending. According to the spring forecasts, the eurozone economy will grow by 2.6 percent in 2007 and 2.9 percent for the EU.

Source: Xinhua