The eurozone economy was in technical recession in the first three months of 2023, data from European statistics agency Eurostat showed on Thursday, after downward revisions of growth in both the first quarter and the final quarter of 2022, according to Reuters.
Eurozone gross domestic product (GDP) fell by 0.1% in the first quarter compared with the fourth of 2022 and was 1.0% up from a year earlier, Eurostat said in a statement.
That compared with flash estimates of growth of 0.1% and 1.3% published on May 16. Economists polled by Reuters had forecast on average respectively zero and 1.2% expansion.
The revision was principally due to a second estimate from Germany’s statistics office showing that the euro zone’s largest economy was in recession in early 2023.
The eurozone figure for the fourth quarter of 2022 was also cut to -0.1% from a previous reading of zero. The revisions confirmed that the eurozone was also in a technical recession.
This had been expected towards the end of last year as the eurozone wrestled with high energy and food prices and rising interest rates designed to curb inflation, but initial estimates had suggested the region had avoided this.Along with Germany, GDP also declined quarter-on-quarter in Greece, Ireland, Lithuania, Malta and the Netherlands.
Eurostat said that household spending stripped 0.1 percentage points, public expenditure 0.3 points and inventory changes 0.4 points from quarterly GDP. Gross fixed capital formation added 0.1 points and while net trade a further 0.7 points as imports declined.