FRANKFURT, Germany (AP) – Europe's economy picked up slightly at the start of the year, with the January-March quarter showing a weaker pace compared with the last three months of 2023 as consumers eased the burden of inflation and Germany's economy stagnated. recorded a growth of 0.3%. The continent's largest island began to show modest signs of life.
The 20-nation eurozone recorded its strongest performance since the third quarter of 2022, with each of the last two quarters of 2023 falling by 0.1%, according to official figures released by the European Union's statistics agency Eurostat on Tuesday. Reduced and improved.
High inflation, which eroded consumer purchasing power, and soaring energy prices linked to Russia's cutoff of most natural gas supplies were holding the economy back.
Those headwinds have eased as energy prices fell and inflation fell to 2.4% in April. But the European Central Bank's record-high interest rates aimed at curbing inflation added another hurdle, raising credit costs for businesses and consumers.
Inflation is currently not far from the 2% target set by the European Central Bank, leading to speculation that the euro zone central bank will lower its benchmark interest rate from its current record high of 4% in June. .
Germany, where economic stagnation continues to debate how to get the economy back on track, grew by 0.2% in the first three months of this year after contracting by 0.5% at the end of last year.
Although this rise is welcome, Germany faces challenges such as excessive bureaucracy, a lack of skilled labor, insufficient investment in infrastructure such as rail networks and high-speed internet, and slow adoption of digital technologies in business and business. Concerns about the long-term problems that are causing the crisis are unlikely to go away. government. “Germany's well-known structural weaknesses will not disappear overnight and will limit the pace of recovery this year,” said Carsten Brzeski, head of global macro at ING Bank.
France, the eurozone's second largest economy, recorded growth of 0.2%, while Spain was one of the countries with the highest growth rate at 0.7%. The eurozone-wide figure was boosted by a 1.1% rise in Ireland, which reflected economic data for multinational companies headquartered in Ireland.
