BRUSSELS—The eurozone grew only marginally in the first three months of 2023 and at a rate lower than market expectations after stagnation at the end of last year, preliminary data showed on Friday.
Gross domestic product in the eurozone expanded by 0.1 percent in the first quarter, below expectations in a Reuters poll for 0.2 percent growth. Compared to a year earlier, growth was 1.3 percent against expectations of 1.4 percent.
That compared with zero growth in the previous quarter for the current 20-nation eurozone and a quarterly decline of 0.1 percent for the 19 countries that were in the eurozone at that point.
Among the bloc’s biggest countries, Germany registered no growth after contraction in the final quarter of 2022. The economies of France, Italy, and Spain did expand.
Surging inflation due to high energy costs following Russia’s invasion of Ukraine and rising food prices, waning confidence and increased interest rates have taken a toll on the single currency’s economy.
But the economy has displayed some unexpected resilience, too, much like during the COVID-19 pandemic, when growth outperformed expectations as businesses adjusted faster to changed circumstances than policymakers had predicted.
But even if the bloc is doing better than feared, growth in 2023 will be among the weakest on record due to a large drop in real incomes and surging interest rates.
The European Commission is forecasting that the eurozone will expand by 0.9 percent this year and by 1.5 percent next. The EU executive said the bloc would avoid a recession, but was beset with challenges—from inflation and monetary tightening to weak external demand and general uncertainty.
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