Recession in the eurozone. The coup that surprised at the beginning of June now loses its meaning. Eurostat has corrected the advance growth data for the first quarter of the year, so it went from a contraction of 0.1% quarter-on-quarter to a stagnation of 0%, according to an update of the data from the European statistical office. Thus, two downward quarters are no longer chained, after -0.1% at the end of 2022, and one cannot speak of a technical recession. The economy, however, is stagnant.
The German locomotive does remain in recession. Its GDP accumulates a fall of 0.5% in the fourth quarter of 2022 and another of 0.3% at the start of this year. Lithuania (-0.5% in the fourth quarter of 2022 and -2.1% in the first of 2023) and Estonia (-1% and -0.6%) are also in recession. Ireland also flirts with it, which did not grow at the end of last year and falls 2.8% in 2023, corrected from 4.3%.
In the case of Spain, it advances 0.5% and 0.6%. France, another of the large economies, came out of stagnation with a rise of 0.2% this year, while Italy went from -0.1% to 0.6% growth.
Doubts do not go away. Industry is faltering, inflation remains high in the euro zone – core inflation remains above 5% – and the European Central Bank is preparing a new rate hike as soon as next week. Today the reference rate is at 4%.
“Whether the euro zone contracted during the winter or not, the outlook remains weak,” said Jamie Rush, chief Europe economist at Bloomberg Economics. “As the impact of the energy shock wears off, it is giving the baton to a tightening of the tight monetary policy. That will keep growth slow for the rest of the year.”
