Eurozone slips into recession after revisions by Germany and Ireland

BRUSSELS, June 8 (Reuters) – The euro zone economy was in a technical recession in the first three months of 2023, data from the European statistics agency Eurostat showed on Thursday, after downward revisions to growth in both the first and last quarters. 2022.

Gross domestic product (GDP) for the 20-nation eurozone fell by 0.1% in the first quarter compared to the fourth quarter of 2022 and was up 1.0% from a year earlier, Eurostat said in a statement.

That compared with flash estimates for growth of 0.1% and 1.3% published on May 16. Economists polled by Reuters had on average forecast zero and 1.2% expansion, respectively.

The revision was mainly due to a second estimate from Germany’s statistics office that showed the eurozone’s largest economy was in recession by early 2023.

The contraction in Ireland’s economy widened to 4.6% from a preliminary estimate of 2.7%, although this negative was due to the impact of large multinationals on growth there.

The Eurozone Q4 2022 figure also eased to -0.1% from a previous reading of zero.

A recession was expected towards the end of last year as the euro zone struggled with high energy and food prices and as a post-pandemic spending boom faded, but initial estimates had suggested the region had avoided this.

Capital Economics said the outlook for the eurozone economy was poor, with a slowdown likely again in the second quarter as the impact of higher interest rates took hold.

S&P Global Market Intelligence said it forecast an uptick in the second quarter, led by the services sector, followed by a subsequent slowdown and a risk of another recession in late 2023, or early 2024, as tighter economic conditions take effect.

Along with Germany and Ireland, GDP also fell from quarter to quarter in Greece, Lithuania, Malta and the Netherlands.

Eurostat said household spending fell by 0.1 percentage point, government spending by 0.3 point and inventory changes by 0.4 point from quarterly GDP. Gross investment increased by 0.1 points and net trade by another 0.7 points as imports declined.

Conversely, employment growth accelerated at the start of 2023, rising to 0.6% in the first quarter from 0.3% in the fourth quarter of 2022, in line with previous estimates. This was an increase of 1.6 per cent from the previous year.

On a quarterly basis, employment grew in all countries except Greece, Lithuania and Slovakia.

For further details on Eurostat data click on:

http://ec.europa.eu/eurostat/news/news-releases

Reporting by Philip Blenkinsop; Editing by Sharon Singleton

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