The Eurozone is in recession as rising costs reduce consumer spending.
According to revised estimates, the eurozone entered a recession this winter as consumers were hammered by rising costs.
The economy of the 20-country union contracted by 0.1% between January and March, following a 0.1% contraction in the last three months of 2022.
A recession is commonly described as an economy contracting for two consecutive three-month periods, or quarters.
Rising food and energy prices have weighed on households in the eurozone, as they have in other countries.
Household spending in the EU declined by 0.3% in the first three months of 2023, after falling by 1% the previous quarter.
According to preliminary estimates, the eurozone averted a recession and expanded by 0.1% in the first three months of the year. However, Eurostat data revealed that it had declined in the first quarter.
Revised data from Germany, Europe’s largest economy, led to the country’s descent into recession.
Germany announced last month that it had entered a recession at the start of the year, with its economy contracting by 0.3% between January and March.
Oxford Economics professor Riccardo Fabiani predicted only “soft growth” in the eurozone in the next months since interest rates are still rising and “inflationary pressures are still present.”
The poor news comes after a difficult year for European economies, with rising energy prices caused by Russia’s assault on Ukraine driving up living costs.
In order to temper surging prices, the European Central Bank raised interest rates by 3.75 percentage points.