Economists attribute the reversal to the economic performance of a single country
A contraction of 0.1% was expected by economists in the Eurozone for the last quarter of 2022, but in the end the figures published earlier caused a surprise as it showed a marginal growth of 0.1%.
Economists attribute the turnaround to the economic performance of a single country, Ireland.
“The Irish economy, boosted by the presence of multinationals, grew by 3.5%, contributing 0.1 percentage point to the Eurozone’s pace and tipping the scales in favor of growth in the bloc as a whole,” said Jamie Rush, head economist for Europe at Bloomberg Economics.
Ireland’s impressive performance has always puzzled economists because of the disproportionate contribution of business giants such as Google, Twitter and Pfizer to the pace of growth. In fact, the government chooses other data to monitor growth.
“Eurozone growth would have fallen to 0% if Ireland had not been included,” Bert Collin, an economist at ING, agreed to Bloomerg.
Positive growth in the fourth quarter
According to Eurostat’s preliminary data, published today, after growing by 0.3% in the third quarter of 2022, the Eurozone economy recorded growth of 0.1% at the end of 2022.
Europe’s largest economy, Germany’s, shrank by 0.2% in the final quarter of 2022, with analysts now expecting Germany to slip into recession.
“Germany has likely entered a shallow and short recession in the fourth quarter that will last into the first quarter before the economy stabilizes in the second quarter (of 2023),” said Salomon Fiedler, an economist at Berenberg, according to CNBC.
The bloc’s second-biggest economy, France, grew 0.1 percent in the fourth quarter, boosted by investment and trade. It is noted that analysts expected stagnation in the last quarter.
Also, according to data from the French statistics authority, inflation in the country increased by 6% annually compared to 5.9% in December.
The small increase was due to rising food and energy prices.
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