Eurozone entered recession in the first quarter after downward revision to GDP

By Joshua Kirby

The economy of the eurozone slipped into technical recession in the first quarter of the year, as forecasts were revised downward both for the end of last year and the first three months of 2023.

The bloc’s gross domestic product fell 0.1% in the first three months of the year, data from statistics agency Eurostat showed Thursday, below the previous estimate of slight growth.

The agency also lowered its final estimate for the last quarter of 2022 to a 0.1% fall from a previous flatline estimate, meaning the bloc entered a technical recession, which typically refers to two quarters of negative growth.

The reading is below the flat growth expected according to an average of economists’ polled by The Wall Street Journal ahead of the release.

Some economists nevertheless anticipated a potentially weaker showing. The revision to a decline was likely, analysts at UniCredit said ahead of the release, pointing to worse figures in Germany and Ireland and weakness in private consumption.

Germany, the bloc’s largest economy, itself entered recession in the first quarter as household spending was squeezed by high inflation rates, according to figures published at the end of last month.

Both government and household consumption were lower on the quarter in the eurozone, as were both imports and exports, Eurostat said.

Compared with the same period the previous year, GDP rose 1%, Eurostat said. The agency had previously estimated a 1.3% rise on the year.

Write to Joshua Kirby at; @joshualeokirby

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