Europe has narrowly avoided falling into a recession after the economy posted flat growth in the fourth quarter of 2023.
According to the European Union’s statistics agency, gross domestic product (GDP) across the Euro economic zone was flat compared with the previous third quarter of 2023 and grew 0.1% from a year earlier.
In a preliminary estimate, the European Union’s economic zone was estimated to have posted growth of 0.5% for all of 2023.
In the third quarter of last year, Europe’s GDP declined 0.1%. Had GDP also decreased in Q4, it would have met the technical definition of a recession, which is two consecutive quarters of economic contraction.
Europe’s largest economy, Germany, posted a 0.3% decline in the final quarter of 2023, though it too avoided a technical recession.
The French economy held steady in Q4, while Spain’s economy expanded by 0.6%.
A survey of sentiment conducted by the European Commission found that consumer confidence is declining across the continent while the outlook among businesses is slightly better.
Economists say that Europe’s economy has been slowing due to a decline in wages, high energy prices, and lower levels of fiscal support from governments.
The European Central Bank has raised interest rates to record levels to lower inflation from a peak of 10.6% in October 2022 to 2.9% in December of last year.
The next inflation reading for Europe is due to be published on Feb. 1.