Euro Zone GDP Grows 0.1% in Q1, Below Expectations

FRANKFURT, April 30 - The euro zone economy expanded by a modest 0.1 percent in the first quarter, Eurostat reported Thursday in its preliminary estimate, marking the first reading of activity since disruptions from the Iran conflict began in late February.

The flash estimate for gross domestic product in the 21-country bloc covers the three months through March and fell short of economists' expectations of 0.2 percent growth, as well as the pace recorded in the prior quarter. The region, heavily reliant on energy imports, faces heightened risks from interruptions in oil, gas and other shipments through the Strait of Hormuz compared with other advanced economies.

Recent surveys underscore signs of a broader slowdown. Business sentiment has weakened, the services sector has deteriorated, corporate profits have declined and exports continue to suffer from tariffs. Banks have also indicated stricter credit conditions, adding pressure on economic momentum.

These developments come amid an energy-driven uptick in inflation, presenting challenges for the European Central Bank. The ECB's governing council meets Thursday and is expected to hold interest rates steady. Financial markets,...