The euro zone economy fell into a technical recession in the first three months of 2023, data from statistics agency Eurostat showed on Thursday as signs emerge that central bank rate hikes will crimp the region's future growth prospects.
Gross domestic product for the 20-country euro zone fell by 0.1% in the first quarter compared with the final quarter of 2022, when GDP also slipped by 0.1%, revised from a previous reading of zero. Two successive quarters of contraction are commonly described as a technical recession.
"Going forward, growth will remain soft despite dropping wholesale energy prices, as monetary policy tightening dents investment and still-present inflationary pressures constrain consumption," they said.by Reuters expect quarterly growth to rebound by an albeit modest 0.2% in each of the remaining three quarters of this year and tip the European Central Bank to hike by a further 25 basis points at both its June and July meetings in its effort to counter stubborn inflation.
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