The European market recorded a GDP of 0.0 percent in the first quarter of 2023 compared to the fourth quarter of 2022.
The European economy showed market resilience during the first quarter despite being cut off from Russian oil and gas supplies since the invasion of Ukraine. However, the European Union market was marred by high inflation amid flight of bank deposits similar to the banking crisis in the United States. Nevertheless, the ECB continued to raise interest rates, with the latest update being pushed by 50 basis points, to combat high core inflation.
Notably, some policy makers at the European Central Bank are working to raise interest rates next week by about 25 basis points, which could push the base rate above 3 percent. The Eurozone is currently fighting inflation of 6.9% and core inflation of around 5.7%.
Economic outlook for the European market
During the first quarter, the eurozone economy grew by 0.1%, according to preliminary figures released on Friday. The European Union missed analysts’ expectations for growth in the first quarter, which had been expected at 0.2 percent, according to a Reuters poll. However, the European economy expanded by around 1.3 percent year on year but still below analysts’ expectations of 1.4 percent.
According to a report before you stand, the European market recorded a gross domestic product (GDP) of 0.0% in the first quarter of 2023 compared to the fourth quarter of 2022. In addition, data from the Federal Statistical Office (Destatis) showed that the final consumption expenditure of both households and households. The government retreated at the beginning of 2023 in the eurozone. Reportedly, positive contributions came from capital formation and exports in the European market during the first quarter.
Earlier this month, data from Eurostat showed a downward revision in fourth-quarter 2022 GDP estimates for the eurozone from quarterly growth of 0.1 percent to no growth, after growth of 0.4 percent during the third quarter of last year.
The European market was able to avoid a much-feared recession during the first quarter of 2023. According to Carsten Brzeski, global head of macroeconomics at Dutch bank ING, the drop in wholesale energy prices, warmer-than-expected weather, and fiscal stimulus helped the European market to Avoiding stagnation was widely feared during the winter.
However, Brzeski noted that data from individual countries will be crucial to the bloc’s future growth prospects. Moreover, the ongoing race between positive momentum in European countries and wage growth on the other hand prompted the European Central Bank to further monetary tightening policies.
As a result, EU regulators may look to diversify leading economies like Germany and France amid looming US fears of recession in the second half of 2023.
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