European GDP, 1st Quarter 2023:  The preliminary flash estimate of GDP from Eurostat for the 1st quarter of 2023 shows an increase of +0.3% for the EU and +0.1% for the Euro-zone.  In both cases this is an improvement from the previous quarter which had a decline of -0.1% in the EU and no change for the euro-zone.  Therefore, while growth is far from strong this sharp turnround for the EU does mean that a recession will have been avoided.

The 4-quarter cumulative growth rate has, however, slowed and is now +1.3% for both the EU and the Euro-zone – it had been +1.7% and +1.8% respectively in the 4th quarter of 2022 (note that this is not the same as the growth rate for the calendar year).

Only a few countries have released their individual data at this stage.  Of those whose economies contracted in the 4th quarter, Italy and Sweden look to have avoided a recession with quarter-on-quarter growth of +0.5% and +0.2% respectively at the start of 2023;  Germany is closer to the border line having recorded a flat trend for Q1-23 – if this does not get revised to a negative, then recession will, technically have been avoided.

Similarly, Austria had a flat trend for Q4-22 and a decline of -0.3% in Q1-23;  clearly, they have a risk of recession in the first two periods of this year but were the Q4-22 figure to get revised down, then this would be another route to recession.  Ireland, whose economy contracted by -2.7% at the start of 2023 is also at risk of recession this year, although their short-term data is notoriously “lumpy” because of dividend payments.

For more details, you can download the Euro-indicators report from their website at (28 April).

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