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Euro zone growth flat in fourth quarter of 2022

New Eurostat figures show flat GDP growth in the euro zone in the last quarter of 2022
New Eurostat figures show flat GDP growth in the euro zone in the last quarter of 2022

GDP growth in the euro area was flat in the last three months of last year compared to the previous three months, according to figures published by Eurostat.

GDP across the EU fell slightly by 0.1% over the same period.

That compares to quarterly growth of 0.4% in the third quarter in both the euro area and the EU. Annual GDP growth in 2022 was 3.5% in both the euro areas and EU.

Irish GDP, which was reported last week by the Central Statistics Office, grew by 0.3% in the fourth quarter of last year and by 12% over 2022.

The fourth quarter figure was revised downwards from an initial estimate of GDP growth earlier this year of 3.5%.

This was due to more data becoming available which showed a relative decline in investment by companies in plant and machinery in the second half of last year compared to an exceptional increase in the first part of the year.

During that period there was heavy investment in data centres and Intel's new chip plant in Leixlip, Co Kildare.

Today's figures show that the three fastest growing economies in the EU in the fourth quarter of last year were Greece (1.4%), Malata (1.2%) and Cyprus (1.1%).

Growth declined the most in Poland (-2.4%), Estonia (-1.6%) and Finland (-0.6%).

Eurostat today also revised down the figure for employment growth in the euro zone to 0.3% quarter-on-quarter from a previously reported 0.4%. The year-on-year number was 1.5%, in line with earlier estimates.

This pushed the total number of people with jobs to 165 million, 3.6 million more than at the end of 2019, just before the Covid-19 pandemic struck.

Strong employment growth highlights how tight the labour market is and signals a problem for the European Central Bank in its fight to bring inflation back to 2% from double digit territory last autumn.

A recession had been expected to boost the jobless rate, cooling the labour market and keeping a lid on wages.

But firms, which struggled to rehire workers after the pandemic, appear to be hanging onto staff even through a slowdown.