The Euro area finally reports that it did not slip into a technical recession, after two consecutive quarters of shrinking activity. The fourth quarter showed a pause in the downturn, following a 0.1% drop in the third quarter, according to preliminary figures from Eurostat.
After the third quarter’s 0.1% contraction across the European Union, activity steadied in the final quarter, preventing an outright technical recession for the region.
Comparing the fourth quarter with the same period in 2022, Eurozone GDP grew modestly by 0.1%, while the broader EU increase stood at 0.2%.
The latest quarterly performance varied across member states. The strongest growth in the fourth quarter was recorded in Portugal at 0.8%, followed by Spain at 0.6%. Belgium and Latvia each posted 0.4% gains.
On the weaker side, Ireland experienced a notable decline of 0.7% in the last quarter of 2023, with Germany and Lithuania showing declines of 0.3% in both cases.
Looking at annual results, the first estimate for 2023 shows the eurozone and the EU expanding by 0.5%. In 2022, the euro area had grown by 3.5% and the Twenty-Seven by 3.4%, reflecting a stronger performance the previous year. Source: Eurostat.
Among the major euro area economies, Spain stood out with an average annual growth of about 2.5% in 2023, while France rose by around 0.9% and Italy by roughly 0.7%. Germany, Europe’s largest economy, saw a contraction of about 0.3% in 2023, underscoring divergent trajectories within the single currency bloc. Source: Eurostat.
Across the Atlantic, the United States posted a 0.8% increase in GDP in the fourth quarter, maintaining a pace close to four-tenths higher than the third quarter when growth was 1.2%. Over the full year 2023, the U.S. economy expanded by about 2.5%, a step up from 2022’s 1.9%, even as policy makers continued to tighten monetary conditions. Source: Eurostat and national statistical offices combined with U.S. Bureau of Economic Analysis.
Turning to Asia, the Chinese economy was forecast to rise by around 5.2% in 2023, reflecting a notable acceleration from 2022 when the growth rate was near 3%. The stronger 2023 pace followed loosening COVID-19 restrictions and a stabilization of domestic demand after earlier disruptions. This comparison underlines the contrasting growth paths seen outside Europe alongside the EU and euro area momentum. Source: Eurostat and national statistical agencies.