According to Eurostat, GDP in the Eurozone shrank by 0.1% in the first quarter of this year. It was preceded by a similar decrease in GDP in the fourth quarter of 2022. A decline in GDP over two consecutive quarters is a sign of recession.
According to experts, the Eurozone economy will “remain depressed” in the second and third quarters. Andrew Cunningham, Chief Europe Economist for Capital Economics, told CNN that consumer spending had been hit hard by a combination of high inflation and rising interest rates. Diego Iscaro, Head of European Economics at S&P Global Market Intelligence, believes the weakness will continue through the end of the year. That said, he does not expect this situation to keep the ECB from raising interest rates further.