Brussels, April 30 (BNA) The eurozone grew only marginally in the first three months of 2023 and at a rate less than market expectations after the slump at the end of last year, preliminary data showed on Friday.
Gross domestic product in the eurozone grew 0.1% in the first quarter, below expectations in a Reuters poll for growth of 0.2%. Compared to the previous year, the growth was 1.3% against expectations of 1.4%.
Reuters reported that compared to zero growth in the previous quarter for the current 20-country eurozone and a quarterly decline of 0.1% in the 19 countries that were in the eurozone at the time.
Among the bloc’s largest countries, Germany did not register any growth after contracting in the fourth quarter of 2022. The economies of France, Italy and Spain expanded.
Rising inflation due to rising energy costs, rising food prices, waning confidence and increasing interest rates have had a negative impact on the single currency economy.
But the economy has shown some unexpected resilience, too, such as during the COVID-19 pandemic, when growth outpaced expectations as companies adapted faster to changing conditions than policymakers expected.
But even if the bloc does better than feared, growth in 2023 will be among the weakest on record due to a significant drop in real income and higher interest rates.
The European Commission expects the eurozone to expand by 0.9% this year and by 1.5% next. The EU executive said the bloc will avoid recession, but it faces challenges – from inflation and monetary tightening to weak external demand and general uncertainty.
Rial