The euro zone economy grew by 0.3% in the first quarter of the year, suggesting a slow recovery is now underway after six quarters of stagnant or negative growth in a row, Eurostat said today, confirming a preliminary estimate.
In the previous quarter, however, the euro zone economy contracted at a rate of 0.1%, indicating that the bloc was in recession, as many economists had long predicted.
The economy shrank by 0.1% in both the third and fourth quarters, meeting the traditional definition of a recession of two consecutive quarters of negative growth.
Among the biggest euro zone countries, Spain was the strongest performer in the first quarter with 0.7% growth while Germany, France and Italy were all at or just below the euro zone average.
Employment meanwhile grew by 0.3% in the first quarter, confirming anecdotal evidence that the labour market continued to tighten as firms were hoarding labour in anticipation of a rebound in growth.
While the European Central Bank raised interest rates to a record high in recent years to sharply slow growth and inflation, firms held on to workers, unlike in most other recessionary episodes.
The main reason is likely to be their post-pandemic experience, when they struggled to rehire workers and much of the services sector struggled to function due to acute labour shortages.
