Europe inched closer to recession in 2023

Hit hard by successive crises, the European continent is no longer the growth engine of the past. Euro zone countries are currently going through a very difficult situation, marked by a slowdown in growth. Indeed, this political-economic bloc narrowly avoided recession in 2023, according to Eurostat figures.

Indeed, the German machine is rusty and France is struggling to cope. The locomotives of Europe are no longer capable of bringing growth to the old continent. Eurostat suggests in its latest estimates, published this Tuesday, January 30, that “ During the fourth quarter of 2023, seasonally adjusted GDP in the euro area and the EU remained stable compared to the previous quarter.

“

The Statistical Office of the European Union adds that “ GDP contracted by 0.1% during the third quarter of 2023
in both areas ” Thus the continent narrowly escaped recession. Eurostat highlights that, according to the first estimate of the annual growth rate for 2023, based on quarterly data adjusted for seasonal variations and calendar effects, GDP in the euro area and in the EU increased by 0.5%.

However, this organization warns that “ These preliminary flash estimates of GDP are based on incomplete data sources that will still be subject to revision

“

The European economy is on the verge of recession

In detail, Eurostat indicates that according to available data, Portugal has achieved the largest increase on the continent compared to the previous quarter. The country achieved a growth of 0.8%. It is followed by Spain with 0.6%, Belgium and Latvia with 0.4%.

Regarding the decline in growth, Ireland leads the worst performing countries with a decline of 0.7%. Germany and Lithuania, for their part, fell -0.3% each. It must be said that the growth rate compared to 2022 was positive for six countries and negative for five European countries.

It should be noted that the European economy will suffer from higher interest rates in 2023, imposed by the European Central Bank (ECB) to combat record inflation. A contraction in credit weighed on investment and consumption by businesses and households. For their part, European exports have been hit hard by the slowdown in global demand.