- 20-nation Eurozone Q1 and Q4/2022 GDP both cut to -0.1%
- Germany, Ireland Q1 figures revised below
- Employment growth increases to 0.6% in Q1
BRUSSELS, June 8 (Reuters) – The euro zone economy was in technical recession in the first three months of 2023, data from European statistics agency Eurostat showed on Thursday, after downward revisions to growth in the first and final quarters. 2022.
Gross domestic product (GDP) for the 20-nation euro zone fell by 0.1% in the first quarter compared to the fourth quarter of 2022 and increased by 1.0% from a year earlier, Eurostat said in a report.
Economists polled by Reuters had forecast an average expansion of zero and 1.2%, compared with flash estimates of 0.1% and 1.3% growth published on May 16.
The revision was mainly due to a second estimate by Germany’s statistics office that showed the euro zone’s largest economy was in recession as early as 2023.
Contraction in Ireland’s economy widened to 4.6% from an initial estimate of 2.7%, although this negative was due to the impact of large multinationals on growth there.
The Eurozone figure for the fourth quarter of 2022 was also cut to -0.1% from a previous reading of zero.
A recession was expected late last year as the euro zone wrestled with higher energy and food prices and a post-pandemic spending boom faded, but early estimates said the region avoided this.
The Capital Economist said the outlook for the euro zone economy was grim and another contraction could occur in the second quarter due to the impact of higher interest rates.
S&P Global Market Intelligence predicts a pick-up in the second quarter led by the services sector, followed by a slowdown and a risk of a new recession in late 2023 or early 2024 as tight financial conditions take hold.
Along with Germany and Ireland, GDP also fell in the quarter in Greece, Lithuania, Malta and the Netherlands.
Eurostat said household spending added 0.1 percentage points to quarterly GDP, public spending 0.3 points and inventory changes 0.4 points. Gross fixed capital formation added 0.1 points and net trade added another 0.7 points as imports fell.
Conversely, employment growth accelerated in early 2023, rising to 0.6% in the first quarter from 0.3% in the fourth quarter of 2022, according to previous estimates. This is an increase of 1.6% per annum.
On a quarterly basis, employment grew in all countries except Greece, Lithuania and Slovakia.
For more details on Eurostat data click:
Report by Philip Blenkinsop; Editing by Sharon Singleton
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