The economy in the euro zone has slipped into recession after all

Status: 08.06.2023 12:40 p.m

Economic output in the euro zone fell surprisingly in the first quarter, after initial estimates still pointed to slight growth. The euro zone thus slipped into a technical recession.

In the euro zone, economic output at the beginning of the year surprisingly fell by 0.1 percent compared to the previous quarter, according to a third estimate from the statistics office Eurostat in Luxembourg.

The currency area has thus slipped into a so-called technical recession. This is what economists talk about when gross domestic product (GDP) shrinks for two consecutive quarters. However, the recession is still very mild. In a previous estimate, slight growth of 0.1 percent had been determined. Economists had expected stagnation.

economic data subsequently adjusted

In the fourth quarter of 2022, the euro economy also shrank by 0.1 percent. Here, too, the data were revised after stagnation had previously been determined. The data refer to the 20 countries of the Eurozone, with Croatia joining at the beginning of the year.

Year-on-year, the economy grew a revised 1.0 percent in the period January through the end of March. In a previous estimate, growth of 1.3 percent had been determined. Economists had expected a revision to 1.2 percent.

Luxembourg with strongest growth

The economic development in the individual countries of the euro zone shows clear differences. In the first quarter, Luxembourg with 2.0 percent and Portugal with 1.6 percent achieved the strongest growth compared to the previous quarter.

On the other hand, strong declines were registered for Ireland with a minus of 4.6 percent and for Lithuania with a minus of 2.1 percent. Germany’s gross domestic product (GDP) fell by 0.3 percent.

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