In Q1, the euro zone economy slows down


The Gross Domestic Product (GDP) of the euro zone experienced a slowdown in the first quarter of the year amid strong inflationary pressure, in a scenario defined by the war in Ukraine.

According to Eurostat, GDP advanced 0.2% in the first quarter of 2022, from 0.3% in the last quarter of 2021.

Simultaneously, inflation stood at 7.5% in April, its highest level since 1999.

Considering the last 12 months, with three consecutive quarters in positive territory, the increase in GDP in the eurozone is 5%, while for the EU as a whole it reaches 5.2% compared to the first quarter of 2021.

Among the main economies of the block, the German GDP grew 0.2%, according to preliminary data, thus avoiding a technical recession after a fall in the last quarter of last year of 0.3%, the annual GDP stood at 4 percent.

The combination of low GDP growth and high inflation has raised warning lights among experts and analysts.

Andrew Kenningham, chief Europe economist at the Capital Economics consultancy, warned that the explosive mix of the two elements could lead to a pullback in the second quarter.

For the expert, the meager result of GDP in the euro zone in the first quarter “will prevent a technical recession at least in the first half of the year.”

However, he added that with rising inflation and fallout from the Ukraine war, GDP is likely to contract in the second quarter.

Bert Colijn, an analyst at ING bank, noted that the 0.2% rise in GDP masks the deterioration in economic circumstances, and inflation continues to trend upwards.



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