Europe’s Economy Falls Into Recession

Europe’s economy has entered a technical recession defined as two consecutive quarters of contraction, according to data from statistics agency Eurostat.

The recession was officially declared after Eurostat revised down its economic growth forecasts for both the first quarter of this year and the fourth and final quarter of 2022.

Gross domestic product (GDP) for the 20-country Euro zone declined by 0.1% in both Q1 of this year and Q4 2022.

Economists polled by the Reuters News Agency had forecast a 1.2% economic expansion in this year’s first quarter.

The downward revisions were due largely to economic weakness in Germany, which is Europe’s largest economy.

Additionally, an economic contraction in Ireland during Q1 widened to 4.6% from an initial estimate of 2.7%, said Eurostat.

Along with Germany and Ireland, GDP also decreased in Greece, Lithuania, Malta, and the Netherlands.

Europe has struggled with high energy and food costs as inflation on the continent remains stubbornly high.

Eurostat said that household spending across Europe declined 0.1 percentage points in Q1, and public expenditures fell 0.3 percentage points during the quarter.