Eurozone entered recession in the first quarter of 2023 – Kommersant

According to the European Statistical Office Eurostat, in the first quarter of this year, GDP in the eurozone fell by 0.1%. This was preceded by a similar contraction in GDP in the fourth quarter of 2022. Two consecutive quarters of GDP contraction is a sign of a recession.

Most of all, the decline in GDP in the euro area in the first quarter of 2023 was affected by a significant drop in this indicator in Ireland – by 4.6%. The Lithuanian economy shrank by 2.1%, the Netherlands – by 0.7%. In Germany, which is also in recession, GDP fell by 0.3% in the first quarter.

According to experts’ forecasts, in the second and third quarters, the eurozone economy will “remain subdued.” As stated CNN Andrew Kenningham, chief economist at Capital Economics for Europe, said consumer spending has been hit hard by a combination of high inflation and rising interest rates. Head of European Economics at S&P Global Market Intelligence Diego Iscaro thinksthat the weakness will continue until the very end of the year. At the same time, he says, this situation is not expected to “keep the ECB from raising interest rates next week.” However, the expert believes that although rates will continue to grow in the near future, “they are already approaching the peak of growth.”

Alena Miklashevskaya