July 20, 2023 (MLN): The euro-area economy avoided a winter recession after all, with revised data showing it stagnated at the start of this year instead of shrinking as previously thought, Bloomberg reported.
Output in the 20-nation currency bloc was flat in the first quarter, according to updated figures on Eurostat’s website on Thursday.
That is up from a prior reading of -0.1%, which, combined with a decline of the same magnitude at the end of 2022, had suggested the first six-month contraction since the Covid-19 pandemic.
“Whether the euro area contracted during the winter or not, the outlook remains one of lingering weakness,” said Jamie Rush, chief European economist for Bloomberg Economics.
“As the impact of the energy shock passes, it is giving way to a squeeze from tight monetary policy. That’ll keep growth slow for the rest of the year.” he added.
Manufacturing proving to be the biggest drag on growth. Inflation is also weighing on the region — though it has almost halved since its 10.6% peak in October, and the European Central Bank is set to hike interest rates again next week.
