It was a close call. Over the last three months of 2023, the euro zone recorded zero growth, narrowly escaping a “technical” recession, namely two quarters in a row of decline in gross domestic product (GDP) − between August and September, it had in fact fallen by 0.1%.
As for the rest, there is little to rejoice about. Over the whole year, the monetary union’s economy grew by only 0.5%, falling into stagnation. “It has been almost sluggish since the third quarter of 2022, when gas prices jumped and the European Central Bank (ECB) began to raise its key rates”summarizes Jack Allen-Reynolds, regional specialist at Capital Economics.
If the increase in rates from the monetary institute helped to calm inflation, falling from 10.6% in October 2022 to 3.4% in December, it nevertheless weighed on credit and investment, while the The continued high level of prices penalized household consumption. In addition, the war in Ukraine, the conflict in the Middle East and geopolitical uncertainties also weighed on business morale.
“The gap is widening considerably with the United Statesunderlines Bert Colijn, economist at ING, recalling that the American economy grew by 2.5% in 2023. Consumption suffered more in the euro zone, because wages were slower to adjust to rising prices, and the surge in energy costs, also more pronounced in the Old Continent, harmed its competitiveness. industrial. » In addition, the United States has supported its reindustrialization more widely than the Europeans, with President Joe Biden’s major spending plan, the Inflation Reduction Act.
Record tourist numbers
The picture is nevertheless very contrasting depending on the Member States. Weighed down by the crisis in its automotive and industrial sector, Germany recorded a recession of 0.3% over the whole of 2023. “Since 2020, the German economy has been facing a long list of crises, temporary or structural: problems on supply chains during the pandemic, then caused by the war in Ukraine, energy crisis, change in the Chinese economy, which grows less quickly », says Carsten Brzeski, country specialist at ING. The economic model of our neighbors is faltering and, with it, that of part of Europe.
Austria is also doing badly: its GDP plunged by 0.7% last year. A traditional pillar of growth, consumption has collapsed under the weight of inflation which peaked at 7.8% over the whole year.
You have 55% of this article left to read. The rest is reserved for subscribers.