According to updated data from Eurostat, the eurozone economy shrank by 0.1% in the first quarter of 2023, according to Bloomberg. This is the second quarter in a row that the European economy has contracted, having contracted 0.1% in the fourth quarter of last year. The agency notes that this is the first semi-annual recession in Europe since the beginning of the coronavirus pandemic.
This reduction came against the background of a significant increase in energy prices in the winter, caused by Russia's special operation in Ukraine and the restrictions imposed by Western countries on Russia. The recession has been a blow to European Union policymakers and European Central Bank (ECB) officials, who have repeatedly said that a recession can be averted, even as inflation rises to historic highs in the eurozone, Bloomberg notes.
According to Eurostat, the decline in eurozone GDP in the first quarter is associated with a decrease in government and household spending. The reduction in inventories also had a negative impact, while trade contributed to the recovery of the European economy, the agency notes.
Of the 20 eurozone countries, the recession has affected seven, according to Forbes. In the first quarter of this year, the economies of Germany, Lithuania, Malta, the Netherlands, Greece, Ireland and Estonia contracted and their GDP has not grown since the end of 2021.