EU and Eurozone Economy Stagnated at the End of 2022; ‘Big’ Underperformed

Economic activity in the EU stagnated in the fourth quarter of 2022, while in the Eurozone it was on the brink of stagnation, reflecting the slowdown of major economies, new estimates from Eurostat showed on Tuesday.

Seasonally adjusted gross domestic product (GDP) of the EU was unchanged in the period from October to December compared to the previous three months, while in the Eurozone it increased by 0.1 percent.

In the summer quarter, activity in both areas rose by 0.3 percent compared to the period from April to June. Compared to the fourth quarter of 2021, activity in the EU increased by 1.8 percent, and in the Eurozone by 1.9 percent, which is also in line with Eurostat’s estimates from the end of January.

In the third quarter, the EU economy grew by 2.5 percent year-on-year, while the Eurozone economy grew by 2.3 percent.

Sharp Decline in Poland

Leading European economies faltered at the end of 2022, with German GDP decreasing by 0.2 percent compared to the previous three months when it had increased by 0.5 percent. The French economy grew by 0.1 percent compared to the period from July to September when it increased by 0.2 percent.

Italian GDP decreased by 0.1 percent compared to the third quarter when it had grown by 0.5 percent. The strongest growth in the fourth quarter among the member states for which Eurostat had data was recorded in Ireland, with GDP increasing by 3.5 percent compared to the previous three months.

Nine member states recorded a decline in GDP on a quarterly basis in the last three months of last year, with the largest decline in Poland, where it decreased by 2.4 percent. This was followed by Lithuania, Austria, and Sweden with declines of 1.7 percent, 0.7 percent, and 0.6 percent, respectively. Eurostat did not have data for Croatia, Greece, Estonia, Luxembourg, and Malta.

Irish Surge

On a year-on-year basis, all countries for which Eurostat had data recorded growth in activity in the last three months of last year, except for Sweden and Lithuania, where it decreased by 0.6 percent and 0.4 percent, respectively. The strongest growth was in Ireland, at 15.7 percent. Romania followed with a GDP growth of five percent, and Cyprus and the Netherlands where it increased by 4.4 percent and 3.4 percent compared to the last three months of 2021.

Among the leading economies, Spain recorded the strongest growth at 2.7 percent. Italy was in second place with a growth rate of 1.7 percent, and Germany in third with 1.1 percent. The weakest growth was recorded in the French GDP, at 0.5 percent compared to the same period in 2021, according to the data.

Stable Employment

The number of employed persons in the EU and in the area of application of the common European currency increased by 0.4 percent in the period from October to December compared to the previous three months, statisticians calculated. In the summer quarter, it increased by 0.2 percent in the EU and by 0.3 percent in the Eurozone. Year-on-year, the EU recorded 1.3 percent more employed persons in the last three months of last year, while the Eurozone recorded 1.5 percent, with almost unchanged growth rates compared to the summer quarter.