Eurozone slips into slight recession
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The eurozone is now in recession, although just barely. If it stays this modest, the slight downturn would be a much better economic outcome than many expected a year ago.
Why it matters: Taken as a whole, the 20-nation currency union is the third largest economic entity on earth, behind the U.S. and China.
The latest: GDP stayed in slightly negative territory for the second consecutive quarter, according to EU data out Thursday.
- That meets the conventional criteria of a recession.
Context: Once overwhelmingly reliant on Russia for its energy needs, Europe suffered an energy crisis in the aftermath of Moscow's attack on Ukraine, resulting in the sudden rupture of supplies of relatively cheap oil and gas.
- Energy prices soared, setting off a cost of living crisis that continues to hamper the ability of consumers to keep spending.
Yes, but: The impact of the Russian energy shock on Europe hasn't been as bad as many expected. For instance, the unemployment rate in the monetary union is at a record low.
What they're saying: "The decline of 0.1% in both the fourth and first quarters is so minimal though, and the labour market is so strong, that it’s hard to argue that this is a recessionary environment," wrote Bert Colijn, an ING senior economist, after Thursday's report.
