The eurozone economy stopped growing in the last quarter of 2022

The European locomotive stopped at the end of last year.

Thomas Osborne
Thomas Osborne
08 March 2023 Wednesday 08:34
52 Reads
The eurozone economy stopped growing in the last quarter of 2022

The European locomotive stopped at the end of last year. There was even a small decline in the EU in the last quarter of 2022. European GDP marked a slight fall of 0.1%. On the other hand, that of the eurozone remained stable compared to the previous quarter, according to recent data published by Eurostat, but this shows that it stopped growing.

In any case, both indicators seem to remove the specter of a deep recession in the Old Continent. For there to be a technical recession, two consecutive quarters of contraction in wealth are needed, so, after these last parameters, there are no signs that this is going to happen.

With regard to Spain, in the last quarter of last year, an advance of 0.2% was noted, the same rate as the three previous months. Among the large economies of the euro area, Spanish GDP is the one that grew the most in this period, when compared with the fall of 0.4% in Germany or -0.1% in Italy.

Among the reasons for this slowdown in the European economy, the slowdown in household consumption stands out, which, in a context of high inflation, fell by 0.9% in the euro area in the last quarter of last year (0.8% in the EU).

The year-on-year growth rate, that is, compared to the last quarter of 2021, remained positive in the euro area, with an increase of 1.8%.

Forecasts pointed to a recession in the eurozone that would trigger the unemployment rate, cool the labor market and keep wages at bay. However, companies, which struggled to rehire workers after the pandemic, appear to be keeping their staff even as the slowdown.

Indeed, the year-on-year figure was employment growth in the last quarter of 1.5%, in line with previous estimates. This brought the total number of people in employment to 165 million, 3.6 million more than at the end of 2019, just before the Covid-19 pandemic.

Next week the European Central Bank (ECB) in all probability and as announced by its president, Christine Lagarde, will raise interest rates by half a point (0.5%) to cool the economy and fight inflation.