Ireland recorded the highest increase in economic growth in the euro zone in the second quarter of this year, new figures from Eurostat show today.
The country recorded GDP growth of 3.3% in the three months to the end of June, compared to the previous quarter. It was followed by Lithuania, which grew by 2.8%.
On an annual basis, Ireland also saw the best rate of growth at 2.8%, followed by Portugal with growth of 2.3% and Spain at 1.8%.
The highest declines were recorded for Sweden (-2.4%), Czechia (-0.6%) and Latvia (-0.5%).
Overall, the euro zone returned to growth in the second quarter of 2023, with a greater than expected expansion after narrowly avoiding a technical recession around the turn of the year, preliminary data showed today.
Gross domestic product in the euro zone expanded by 0.3% in the second quarter, above expectations of 0.2% in a Reuters poll of economists.
Compared to a year earlier, growth was 0.6% compared to expectations of 0.5%.
That compared with zero growth in the previous quarter for the 20-nation euro zone and a 0.1% quarter-on-quarter decline in the fourth quarter of 2022.
Today’s figures show that among the bloc’s biggest countries, France and Spain grew at a sustained pace on the back of stronger exports and tourism while Germany, the euro zone’s biggest country, registered no growth.
Eurostat said today’s preliminary GDP flash estimates are based on data sources that are incomplete and subject to further revisions.
Surging inflation due to high energy costs following Russia’s invasion of Ukraine and rising food prices, higher interest rates and waning confidence have taken a toll on the single currency’s economy.
But the economy has displayed some resilience too, much like during the Covid-19 pandemic.
Growth then outperformed expectations as businesses adjusted faster to changed circumstances than policymakers had predicted.
But even if the bloc is doing better than expected, growth in 2023 is likely to be weak due to a large drop in real incomes and surging interest rates.
The European Central Bank raised the possibility of pausing its interest rate hikes in September as inflation pressures show tentative signs of easing and recession worries mount.