The 17 countries that share the euro posted the strongest annual growth in three-and-a-half years during the first quarter thanks to robust growth in Germany and France, according to The Wall Street Journal. On Friday, the European Union reported that the combined gross domestic product of the eurozone countries grew by 0.8% in the first three months of the year, outpacing forecasts for a 0.6% increase. The strong quarterly growth pushed the annual increase above estimates to 2.5%, which marks the quickest yearly growth since the third quarter of 2007.

The strong figures came as the EU raised its growth outlook for the 27-member region for 2011 to 1.8%, which is up from a 1.7% forecast six months ago. The increase also came with an upwards revision of 2010 growth to 1.6% from the 1.5% previously estimated. The positive data are likely to clear the way for the European Central Bank to tighten monetary policy to contain inflation in the eurozone. Ken Wattret of BNP Paribas said, “Barring an intensification of the crisis in the periphery and much bigger spillover effects, the ECB should prepare the ground at June’s meeting for a rate hike in July.”

Click here to read the story on eurozone growth from The Wall Street Journal.

Click here for coverage of the EU growth forecast from The Wall Street Journal.