Eurozone avoids recession as economy expands in fourth quarter

The eurozone appears to be like set to keep away from a recession after its economic system grew unexpectedly through the last quarter of 2022, regardless of hovering power costs, rising borrowing prices and document excessive inflation.

The area’s economic system expanded by 0.1 per cent between the third and the fourth quarter of 2022, based on official information revealed by Eurostat on Tuesday.

The enlargement was higher than the 0.1 per cent drop forecast by economists polled by Reuters.

The information for the fourth quarter signifies that the area managed to develop in every quarter of 2022, regardless of the power disaster triggered by Russia’s invasion of Ukraine. Companies and households additionally needed to deal with greater borrowing prices, following the European Central Financial institution’s resolution to lift rates of interest by 2.5 share factors through the second half of 2022. Charges have been raised to fight inflation, which hit a document excessive of 10.6 per cent within the yr to October 2022.

Earlier within the day, information confirmed France’s economic system additionally managed to keep away from falling into recession.

The eurozone’s second-largest economic system grew by 0.1 per cent between the third and fourth quarters, France’s nationwide statistics bureau Insee stated on Tuesday. Whereas that was under the 0.2 per cent enlargement recorded over the earlier quarter, it was a slight enchancment on forecasts of no change recorded by Reuters.

Germany reported a fourth-quarter contraction of 0.2 per cent on Monday, putting the eurozone’s largest economic system getting ready to recession.

Knowledge revealed on Tuesday confirmed Italy’s economic system additionally contracted, however by simply 0.1 per cent — a smaller quantity than feared. Spain’s economic system expanded by 0.2 per cent, based on figures revealed final week.

Extra reporting by Daria Mosolova in London and Leila Abboud in Paris