Eurozone entered mildest possible recession over winter, revised figures show
GDP dipped by 0.1% in back-to-back quarters, which is the shallowest recession possible
Weaker German GDP figures meant the Eurozone’s economy declined in the first three months of this year
/ AFP/Getty Imageshe Eurozone entered the shallowest possible recession over the winter, according to new revised data.
The European Central Bank now says that GDP across the currency union down by 0.1% in the first quarter of 2023, after declining at the same rate in the last three months of 2022. It previously said GDP was up by 0.1%.
A recession is usually defined as two consecutive quarters in which the economy shrinks. Therefore, back-to-back quarters with a 0.1% a decline is the mildest recession possible.
Bert Colijn, senior economist for the Eurozone at Dutch bank ING, said the slump shouldn’t be seen as a true recession at all.
“These declines are so minimal that current economic circumstances are better described as broad stagnation,” he said.
“The stagnation of the economy does mark a clear cut from the recent post-pandemic boom though.”
The main reason for the revision was Germany revising down its own growth rate, bringing the Eurozone’s largest economy into recession.
Tom Hopkins, Portfolio Manager at BRI Wealth Management, said the stagnation could continue: “We believe theEeurozone’s performance will remain subdued in the second and third quarters as softer bank lending pulls down investment and consumer confidence remains fragile.”
The UK avoided recession over the same period, though its performance was almost indistinguishable from that of the Eurozone. The British economy eked out growth of 0.1% in the first quarter of this year, after no growth at the end of 2022.