(BRUSSELS) - Economic growth in the 15 countries sharing the euro rebounded to 0.7 percent in the first quarter of the year, boosted by strong German figures, the European Union's Eurostat data agency said Thursday.

The initial estimates were higher than economists' predictions and well above the 0.4 percent Gross Domestic Product (GDP) growth recorded in the last quarter of 2007.

While welcoming the figures, analysts warned the good news is unlikely to last amid weaker business confidence and a slowdown in orders as the strong euro and soaring oil prices, coupled with the US sub-prime mortgage crisis, hit consumers and businesses.

The seasonally adjusted first quarter figure for 12 months was put at 2.2 percent, the same as that recorded in the previous quarter.

For the 27-nation EU as a whole the first quarter growth was also 0.7 percent, compared to 0.5 percent in the previous quarter,

But outstanding component, which boosted the overall averages, was Germany's first-quarter growth figure of 1.5 percent, compared to just 0.3 percent the previous quarter.

However Holger Schmieding, of the Bank of America, cautioned that this "wunder" figure "vastly overestimates the underlying trend," as it is based in part on mild weather in January and February and inadequately recorded Christmas shopping figures.

"The good news is unlikely to last," he warned. "Standard indicators such as weaker business confidence and the slowdown in orders growth suggest that the advance in GDP will lose a lot of momentum over coming quarters."

Jennifer McKeown, European Economist at Capital Economics, said that the region "has certainly started the year on a strong footing" but eurozone GDP growth in the second quarter "could be pretty weak".

Inflation in the eurozone remained undesirably high at 3.3 percent in April, the EU's top economic official said on Tuesday, confirming a first official estimate.

"The figure of inflation ... 3.3 percent is higher than we want," EU Economic and Monetary Affairs Commissioner Joaquin Almunia told reporters on the sidelines of a conference in Brussels, though the rate was down from the record 3.6 percent seen in March.

Further details - Eurostat

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