BRUSSELS, March 9 — The eurozone economy stagnated in the fourth quarter of 2022, the EU’s statistics agency said Wednesday, revising its previous figure recording weak growth.
And the economy of the full 27-member EU contracted by 0.1 per cent in the last quarter compared with the previous period, Eurostat said after compiling revised data.
If the EU economy shrinks in the first quarter of 2023 that will mean it will have entered a technical recession — two straight quarters of economic contraction.
The figures are bad news for Europe, which suffered the brunt of sky-high energy prices after Russia’s assault on Ukraine. In contrast, the US economy grew 0.7 per cent in the fourth quarter.
The agency recorded no change for the single currency area’s economic growth of 3.5 per cent in 2022 but revised the EU’s from 3.6 per cent to 3.5 per cent.
In 2021, the eurozone and EU economy grew by 5.3 and 5.4 per cent respectively.
“There have been some positive signs in the past couple of months, but policy tightening is likely to push the eurozone into recession this year,” Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said in a note.
The European Central Bank (ECB) has been raising rates since last year and if another hike comes in March, it would be its sixth increase since July.
“As more data comes in it is clear that the eurozone economy is struggling,” said ING senior eurozone economist Bert Colijn. “When we look deeper into the GDP release a bleaker picture is revealed.”
“As expected, growth was revised down thanks to weaker than initially released German and Irish data, but even stagnation seems to overstate the real performance of the eurozone economy in the fourth quarter,” he said. — AFP
