For first time in years, euro economy starts surprising on upside

The eurozone economy is sprouting more green shoots than anticipated just as the European Central Bank fires up a money printing program worth more than 1 trillion euros.

An analysis of Reuters polls shows more than half the most important economic reports since the start of the year, as well as data across the bloc's four largest economies, have beaten the consensus forecast and many have topped the highest prediction.

This latest turn, which comes despite concerns over Greece's future membership in the euro and no real respite to conflict in Ukraine, suggests fears of a deflationary spiral in Europe have been overdone.

Germany, Europe's largest economy, is the clear leader. Retail sales growth for January almost tripled the highest forecast and helped propel the wider eurozone figure to over 10 times the Reuters median on Wednesday.

Two other Germany releases - fourth quarter GDP growth and the flash services PMI reading for January - also topped the highest forecast.

Taken alongside average 3.2 percent negotiated pay rises at a time when inflation has evaporated, the data suggest that ECB quantitative easing may soon look like the last thing Germany needs.

Economists point to the greater discretionary income given to consumers by a dramatic fall in energy prices and a significantly weaker euro, partly in anticipation of the ECB?s bond-buying program, as key factors.

"Everyone got caught up in the debate of deflation, Greece and the Ukraine crisis and so expectations were quite low," said Christian Schulz, economist at Berenberg Bank.

"It now seems the deflation story is a positive one for the eurozone since cheaper oil means consumers spend less on energy and have more money in their purse."

While the...