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.
European economies showed market resilience in the first quarter despite disruptions to Russian oil and gas supplies since the invasion of Ukraine. However, EU markets were hurt by rising inflation amid a flight of bank deposits similar to the US banking crisis. Nonetheless, the European Central Bank continues to raise interest rates, pushing them up 50 basis points in their most recent update to combat high core inflation.
Notably, some ECB policymakers are working to raise interest rates by about 25 basis points next week, which could push the core rate above 3%. The Eurozone is currently battling 6.9% inflation and core inflation around 5.7%.
Economic outlook for the European market
The Eurozone economy grew 0.1% in the first quarter, according to preliminary figures released on Friday. A poll conducted by Reuters showed that the EU bloc missed analysts’ first-quarter growth forecasts by 0.2%. Nevertheless, the European economy expanded by about 1.3% on an annualized basis, still short of analysts’ expectations of 1.4%.
reported that statistics, 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) show that households and governments in the eurozone will decline at the beginning of 2023. Positive contributions were reportedly made by capital formation and exports in European markets in the first quarter.
Earlier this month, data from Eurostat showed that the eurozone’s GDP forecast for the fourth quarter of 2022 was revised downwards from 0.1% quarterly growth to zero, following 0.4% growth in the third quarter of last year.
European markets managed to avoid a much-feared recession in the first quarter of 2023. Carsten Brzeski, head of global macro at Dutch bank ING, said falling wholesale energy prices, warmer-than-expected weather and fiscal stimulus were pushing European markets into a widely feared recession over the winter. Helped me dodge.
Nevertheless, Brzeski showed that data from individual countries will be important to the bloc’s future growth prospects. Moreover, the ongoing competition between positive momentum in European countries and wage growth has pushed the ECB to further tighten monetary policy.
As a result, European Union regulators may be eyeing diversification in major economies such as Germany, while France feared a recession in the second half of 2023 amid a looming United States.
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