Freight trains stand on railway tracks at a transshipment station in Frankfurt am Main, western Germany, with the city skyline visible in the background, on January 23, 2024.
Kirill Kudryavtsev | AFP | Getty Images
Preliminary figures published by the European Union's statistics agency, today, Tuesday, showed the stability of the euro zone economy in the last quarter of 2023.
The bloc narrowly avoided the shallow recession expected by economists in a Reuters poll, after growth of 0.1%. Decrease in GDP In the third quarter.
Seasonally adjusted GDP in the euro area was flat compared to the previous quarter and expanded by 0.1% compared to the previous year. In a preliminary estimate, the euro area is expected to register growth of 0.5% during the whole of 2023.
Its largest economy, Germany, Recorded a 0.3% contraction In the last quarter of the year, according to figures also released on Tuesday. The country narrowly avoided a technical recession due to an upward revision to its third-quarter reading, when the economy was stagnant.
The French economy was stable in the fourth quarter, while Spain beat expectations by expanding by 0.6%.
Meanwhile, the European Commission's Eurozone Sentiment Index showed a decline in consumer confidence – although the outlook for businesses in services and industry was slightly brighter.
The euro zone economy is going through a “period of prolonged weakness” led by Germany, while southern European economies are leading the way in growth, Bert Kolen, chief economist at ING, said in a note.
He added, “Germany suffers from weak global demand for goods and that heavy industries suffer from high energy prices.”
He added that the eurozone's divergence from the United States is increasing, partly due to greater declines in inflation-adjusted wages, energy prices hitting industries, and lower levels of fiscal support.
The euro continued to record limited losses against the US dollar after new data on Tuesday, and also recorded strong gains against the British pound. The US economy beat expectations for the end of the year, growing by 3.3% in the fourth quarter. UK figures are due in mid-February.
The European Central Bank has been raising interest rates to a record high over the past year and a half, creating tighter financial conditions across the region that helped cool inflation from its peak of 10.6% in October 2022 to 2.9% in December. The latest euro zone inflation figures are due on Thursday.
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