Marginal growth for Eurozone economy in Q1: Eurostat

The Eurozone's economy grew by 0.1 percent in the first quarter of 2023 compared to the previous quarter, according to a preliminary flash estimate published on Friday by Eurostat, the European statistical service, reported Xinhua.

Meanwhile, the European Union (EU) will record 0.3 percent growth compared to the previous quarter.

Both the Eurozone and the EU grew by 1.3 percent in the first quarter of 2023 compared to the same period last year, Eurostat announced.

Among the member states which have provided data, Portugal recorded the highest increase in its quarterly Gross Domestic Product (GDP), with growth of 1.6 percent quarter-on-quarter.

Spain, Italy and Latvia all recorded 0.5 percent growth in their GDP compared to the previous quarter.

However, negative quarterly growth of 2.7 percent was recorded in Ireland. Austria also registered negative quarterly growth of 0.3 percent.

Year-on-year, all countries that provided data recorded positive growth, except for Germany which recorded yearly negative growth of 0.1 percent for the first quarter of 2023.

Cartsen Brzeski, Global Head of Macro at ING, said the Eurozone's marginal quarterly growth indicates that the monetary union is more resilient than expected, having avoided a recession over the winter due to a combination of factors.

These include a mild winter, lower energy prices, the reopening of China, and fiscal stimulus.

However, differences in economic growth between the countries are "anything but homogenous", which doesn't bode well for the idea of an economic union, according to Brzeski.

"To some extent, this divergence could simply be the result of different time lags for fiscal stimulus and energy price caps, " he explained.

However, he added that it "could also be the start of a more structural rebalancing of the eurozone economy, as Germany's economic business model is clearly the most affected by higher energy prices, energy transition and global trade tensions".

Since momentum in industry and wage increases will meet an opposing force in tightening monetary policy and a possible recession in the United States, Brzeski predicts that growth will remain subdued moving into 2024.