Euro zone exceeds expectations with strong rebound from downturn
Euro zone exceeds expectations with strong rebound from downturn
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Euro Zone Returns to Growth in Q2 2023, Surpassing Expectations
Brussels, July 31 (ANBLE) – The euro zone has experienced a significant rebound, returning to growth in the second quarter of 2023. Preliminary data released on Monday indicated that the expansion exceeded expectations, providing a much-needed boost after narrowly avoiding a technical recession earlier in the year.
According to the report, the euro zone’s gross domestic product (GDP) expanded by 0.3% in the second quarter, surpassing the 0.2% expected by economists in an ANBLE poll. On an annual basis, growth reached 0.6%, higher than the predicted 0.5%.
In comparison, the previous quarter saw zero growth in the 20-nation euro zone, with a 0.1% decline in the fourth quarter of 2022. While Germany, the largest economy in the euro zone, reported no growth, France and Spain both experienced sustained growth due to stronger exports and a boost in tourism. On the other hand, Italy faced a contraction.
The recent economic performance of the euro zone has been impacted by surging inflation caused by high energy costs following Russia’s invasion of Ukraine, alongside rising food prices. Additionally, higher interest rates and waning confidence have taken a toll on the single currency’s economy. However, similar to the situation during the COVID-19 pandemic, the euro zone has showcased resilience, with businesses adapting quickly to changing circumstances, surpassing policymakers’ expectations.
Although the bloc is performing better than anticipated, growth in 2023 is likely to be weak due to a significant drop in real incomes and rising interest rates. The European Central Bank has raised the possibility of pausing its interest rate hikes in September, as inflation pressures show tentative signs of easing and concerns over a recession mount.
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For further information and detailed Eurostat data, please follow the link.
