The eurozone is slipping into recession after the German revision

BRUSSELS (Reuters) – Data from the European statistics agency Eurostat showed on Thursday that the eurozone economy was in a technical recession in the first three months of 2023, after downward revisions to growth in both the first and last quarters of 2022.

Eurostat said in a statement that the eurozone’s gross domestic product fell 0.1% in the first quarter compared to the fourth quarter of 2022 and increased 1.0% from the previous year.

That compares with flash estimates for growth of 0.1% and 1.3% published on May 16. Economists polled by Reuters had, on average, expect expansion of zero and 1.2%, respectively.

The revision was mainly due to a second estimate from the German Statistical Office showing that the eurozone’s largest economy was in recession in early 2023.

The Eurozone figure for the fourth quarter of 2022 was also lowered to -0.1% from the pre-zero reading. The revisions confirmed that the Eurozone was also in a technical recession.

This was expected at the end of last year as the euro zone suffered from rising energy and food prices and rising interest rates with the aim of curbing inflation, but preliminary estimates indicated that the region avoided this.

Besides Germany, GDP also declined on a quarterly basis in Greece, Ireland, Lithuania, Malta and the Netherlands.

Eurostat said household spending fell by 0.1 percentage point, public spending by 0.3 points and inventory change by 0.4 points from quarterly GDP. Gross fixed capital formation added 0.1 point while net trade rose another 0.7 point as imports fell.

For more details on Eurostat data, click:

http://ec.europa.eu/eurostat/news/news-releases

(Reporting by Philip Blenkinsop)

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