The eurozone economy rebounded with unexpected growth of 0.7 percent in the first quarter of the year, boosted by a German surge, but analysts warned on Thursday that the rally could be shortlived.
  
The growth in the 15 countries sharing the euro beat both economists' predictions and 0.4-percent growth in the last quarter of 2007, the data showed.
  
The initial estimates from the European Union's Eurostat data agency showed that the eurozone economy was boosted by particularly strong 1.5-percent growth in Germany, attributed in part to mild January and February weather.
  
Separate French data also pointed to unexpected underlying resilience of the French economy set against eight months of turmoil in global financial markets.
  
While welcoming the figures, analysts warned that the good eurozone news was unlikely to last. They pointed to weaker business confidence and a slowdown in orders, and strength of the euro and soaring oil prices, coupled with the US sub-prime mortgage crisis.
  
"While much stronger than expected eurozone GDP in the first quarter is obviously good news, it is important not to get carried away by it," warned Howard Archer, an economist at Global Insight.
  
"Indeed bad news is increasingly coming now, indicating that the eurozone economy is buckling under tight credit conditions, a very strong euro, elevated oil, commodity and food prices, and slowing growth in key export markets."
  
The seasonally adjusted first-quarter figure over 12 months was put at 2.2 percent, the same as that recorded in the previous quarter.
  
That figure dwarfs the growth shown in the US economy, where fears of recession are rife.
  
There the annual pace of growth in the first quarter was just 0.6 percent according to US data, barely averting the start of a recession, even though some analysts say it feels like one.
  
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.
  
The outstanding component, Germany's first-quarter growth figure of 1.5 percent, compared to just 0.3 percent the previous quarter should also be taken with a pinch of salt, according to Holger Schmieding, of the Bank of America.
  
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, he argued.
  
"The good news is unlikely to last," he added. "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".
  
Meanwhile 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.
  
Despite the lower overall rate, inflation remained far above the European Central Bank's comfort level, which it defines as just below 2.0 percent on an annual basis.
  
The estimated inflation fall in April should also be "treated with caution," the ECB warned.
  
"The continuous strength of oil prices is suggesting ongoing upward pressure on consumer energy prices, and further processed food price increases cannot be excluded, despite a slowdown in short-term dynamics," the ECB said in its monthly report.