From Q3 2022 to Q4 2023, over five quarters, the average quarterly GDP growth for the EU-27 was virtually zero (0.03% to be precise), with all progress occurring in Q1 2023, which saw a growth of 0.33%.
Yearly, the GDP of the EU-27 countries grew by 0.47%, with a two-year growth of 1.67%, and since Q4 2019, the accumulated growth has been 3.94%, or an average quarterly increase of 0.31%. This is below the long-term trend from 2010 to 2019, where GDP grew by an average of 0.39% per quarter, and 0.51% during 2017-2019, compared to a pre-2008 crisis growth of 0.68% per quarter from 2004 to 2007.
For the leading European countries, the situation is as follows:
– Germany is in a recession with a GDP decline of 0.22% over the past year and a 0.12% decrease over two years, with only a 0.34% growth since Q4 2019.
– France grew by 1.07% over the past year, 1.91% over two years, and 2.16% since Q4 2019.
– Spain grew by 0.61% over the past year, 2.81% since Q1 2022, and 4.55% since Q4 2019.
– Italy saw a growth of 2.4% over the past year, an impressive 6.5% over two years, but a more modest 3.7% since the pre-COVID period of Q4 2019.
Eurostat did not provide any additional information on the GDP structure, so a decomposition of key factors is not possible.
Weak demand is one of the reasons for the slowdown in inflation in Europe over the past year, unlike in the US, where higher consumer demand has led to stronger inflationary pressures. In the US, consumer behavior is inadequate in the context of current conditions, with savings decreasing to zero and consumer credit increasing at record rates. In Europe, the public is somewhat more rational, but at the cost of economic stagnation.