Eurostat has revised its previous estimate downward by two tenths today, published in mid-May, which anticipated a 0.1% rise in GDP in the euro area between January and March: it is the first recession recorded in the euro area economy since GDP contracted consecutively in the first and second quarters of 2020 as a result of the impact of the restrictions imposed by the pandemic. In the European Union (EU) as a whole, the economy did manage to recover and advanced by 0.1% after contracting by 0.2% in the previous quarter.
According to seasonally adjusted Eurostat figures, GDP volumes in the Eurozone and the EU were 2.2% and 2.9%, respectively, higher than the level registered in the fourth quarter of 2019, before the Covid pandemic. -19.
Among the EU countries for which data were available, the highest GDP growth in the first quarter of the year corresponded to Poland (3.8%), ahead of Luxembourg (2%) and Portugal (1.6%). The worst economic evolution was observed in Ireland (-4.6%); Lithuania (-2.1%), and the Netherlands (-0.7%).
Among the largest EU economies, Germany entered recession with a first-quarter GDP contraction of 0.3%, after falling 0.5% in the previous three months, while France's GDP increased by 0 .2%, after stagnating in the fourth quarter of 2022, and that of Italy increased by 0.6%, after a contraction of 0.1% between October and December of last year. In Spain, GDP grew by 0.5% in the first quarter of 2023, compared to growth of 0.4% in the three previous months.
In year-on-year comparison (first quarter of 2023 compared to the first quarter of 2022, the GDP of the euro area and the EU as a whole increased by 1% in both cases. In year-on-year terms, the highest GDP growth was registered in Spain ( 3, 8%), ahead of Cyprus (3.4%) and Malta (3.2%), while the largest contractions were observed in Estonia (-3.7%), Lithuania (-2.7%) and Hungary (-1.1%).
During the first quarter of 2023, household final consumption expenditure was the main aggregate component of GDP that had a downward influence, with a fall of 0.3% in both the euro area and the EU (after -1, 0% in the euro area and -0.9% in the EU in the previous quarter).
Consumer spending decreased by 1.6% in the euro area and 0.9% in the EU after increases of 0.8% in the euro area and 0.4% in the EU in the previous quarter ). Gross fixed capital formation increased by 0.6% in the euro area and by 0.3% in the EU (after -3.5% and -2.8% respectively).
For their part, exports decreased by 0.1% in the euro area and increased by 0.1% in the EU (-0.2% and -0.3% in the previous quarter), while imports decreased 1.3% in both the euro area and the EU (-2.5% and -2.3% in the previous year).
In addition to the main aggregate GDP data, Eurostat is also publishing today the employment estimates for the first quarter, data for which it forecasts a rise of 0.6% in the euro area and 0.5% in the EU compared to the previous quarter. In the fourth quarter of 2022, employment increased by 0.3% in both the euro area and the EU.
Compared with the same quarter of the previous year, the year-on-year employment data increased by 1.6% in the first quarter in both the euro area and the EU, after increases, respectively, of 1.5% in the area of the euro and 1.3% in the EU in the fourth quarter of 2022.
Hours worked increased 0.6% in the euro area and 0.7% in the EU in the first quarter of 2023, compared quarter-on-quarter, while in year-on-year comparison they rose 2.0% in the euro area and a 1.9% in the EU.
"These data provide a picture of the labor market that is consistent with the national accounts measure of production and income," says Eurostat. Estonia (4.4%), Malta (2.9%) and Ireland (1.6%) were the Member States with the highest quarter-on-quarter increases in employment, followed by Spain, while the largest falls were registered in Lithuania ( -1.5%), Romania (-1.1%) and Greece (-0.3%).
"The combination of GDP and employment data allows an estimate of labor productivity. Analysis of comparative growth with the same quarter of the previous year shows that productivity growth fluctuated around 1% for both the EU and the Eurozone between 2013 and 2018, before the pandemic caused high volatility in 2020.
In the first quarter of 2023, productivity decreased by 0.6% in the euro area and by 0.5% in the EU
compared to the same quarter of the previous year. Regarding the hours worked, productivity with respect to the same quarter of the previous year decreased by 0.9% in the euro zone and by 0.7% in the EU.