Despite a moderation in growth in the last quarter, the region’s economy grew by 3.6% for the full year
Supply crisis, war in Ukraine, runaway inflation with skyrocketing energy prices, the start of interest rate hikes by the ECB… In 2022, the Eurozone managed to dodge complex economic prospects that created the worst signs of an approaching recession. According to the preliminary estimate of Eurostat, the statistical office of the EU, the region grew by 0.1% in the last quarter of the year.
It is true that the figure indicates a certain slowdown compared to the pace of previous quarters (0.6% in the first, 0.9% in the second and 0.3% in the third). But it is possible to avoid the dreaded economic contraction in light of the voices pointing to a real collapse with the arrival of winter.
The European Commissioner for the Economy, Paolo Gentiloni, celebrated the data via the social network Twitter. “Good news: the Eurozone avoided a contraction in the last quarter of 2022. Several challenges remain, but the outlook for this year looks a little brighter today than in the fall,” he said.
Over the full year, the Eurozone experienced solid growth of 3.5%. Ireland (+3.5%) is the country with the largest increase in the quarter, followed by Latvia (+0.3%) and Spain and Portugal (+0.2%).
Other superpowers such as France rose 0.1%, while Italy contracted 0.1%. Germany, one of the most closely monitored economies due to its greater dependence on Russian gas, did experience a 0.2% GDP decline in the second quarter.
DWS chief economist Martin Moryson notes that the region’s growth is largely due to Ireland’s re-demonstrated power, “distorted by the large number of foreign companies based there for tax reasons”. However, while he believes there are signs that the eurozone will experience a period of weakness over the winter, “technical recession is becoming less and less likely”.
Despite the German figures, analysts are optimistic. In a recent presentation of forecasts, Marko Mrsnik, director of sovereign ratings at S&PGlobal, recalled that one of the keys to the good evolution in the Eurozone is that gas reserves are currently at 90% of their capacity.
“This is very important because, despite the cold at the end of winter, they should still be above 50%, which will facilitate replenishment efforts and avoid a possible risk of shortages,” says the expert.
The International Monetary Fund (IMF) itself has just updated its economic forecasts, pointing out that Eurozone GDP will grow by 0.7% in 2023, up from the previously estimated 0.5%. In the specific case of Germany, the economy is expected to limit growth to 0.1% this year. A few months ago I assumed a contraction of 0.3%.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
