The eurozone grew 0.1% in the final quarter of 2022, narrowly avoiding an economic contraction which would have raised fears that the currency union would enter a technical recession by further shrinking over the first quarter of this year.
According to data released on Tuesday by Eurostat, the EU's official statistics office, the eurozone's growth rate nevertheless slowed significantly compared to the 0.3% growth rate in Q3 after falling from 0.9% in Q2 2022.
Meanwhile, the EU economy remained stable as a whole (ie. posted 0% growth) in the final quarter of 2022, thereby entailing that its growth rate declined in each consecutive quarter last year (from 0.8% to 0.7%, to 0.3%, to 0.0%, from Q1 to Q4 respectively).
Overall, the eurozone and wider EU economy grew by 3.5% and 3.6% respectively in 2022 – well above the global growth rate of 2.9%.
Belgium: A microcosm of the EU?
As seen in the eurozone as a whole, the study found that the Belgian economy grew by 0.1% in the final quarter of 2022. Much like the wider EU bloc, Belgium posted steadily declining growth rates over the course of the year (from 0.6%, to 0.5%, to 0.2%, to 0.1% from Q1 to Q4 respectively).
The Eurostat report corroborates the conclusions of a recent National Bank of Belgium (BNB) study, which likewise found that the Belgian economy grew by 0.1% over the fourth quarter of 2022.
But both the Eurostat and BNB studies contrast markedly with another report published earlier this month by the Institute of Economic and Social Research (IRES) at UCLouvain, which found that the Belgian economy declined 0.3% between September and December 2022.
In addition, UCLouvain predicted the Belgian economy will shrink a further 0.1% in the first quarter of this year – technically pushing the Belgian economy into recession, which is defined as two consecutive quarters of negative growth.
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On Monday, the IMF upwardly revised its 2023 growth forecasts for the eurozone area in 2023 (to 0.7% from 0.5%) as well as for the world economy as a whole (to 2.9% from 2.7%). It suggested that the currency union's improved economic prospects were principally a consequence of a decline in gas prices precipitated by "higher non-Russian pipeline and liquefied natural gas flows, compression of demand for gas, and a warmer-than-usual winter".
However, the fund also noted that the eurozone and the wider global economy remain in a remarkably fragile condition.
"Severe health outcomes in China could hold back the recovery, Russia’s war in Ukraine could escalate, and tighter global financing costs could worsen debt distress," it noted. "Financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress."
