The first quarter of 2023 has seen economic conditions in Europe remain weak, with two major economies experiencing low growth rates.
French economic growth during the period was recorded at a mere 0.2%. Despite this, French Economy Minister Bruno Le Maire described the performance as solid, citing ongoing investment and job creation by companies.
While this figure represents an improvement on the previous quarter’s stagnation at 0%, public spending in support of the economy was flat at 0%, having been recorded at minus 1% in Q4 2022.
The ongoing Russian-Ukrainian conflict has had a significant impact on inflation, eroding people’s purchasing power and hindering economic growth.
Food consumption saw a decline of 2.3%, while food inflation skyrocketed to above 10%. This marks the fifth consecutive quarter of decline in the sector.
Despite widespread strike action throughout the quarter, the economy remained relatively unaffected. The manufacturing industry, however, only managed to grow by 0.7%. The reopening of nuclear power plants led to a 3.1% increase in energy supply.
Germany, Europe’s other major economy, recorded zero growth in Q1 2023. While this news is disappointing, it does spare the country from entering into recession territory, having recorded a decline of 0.5% in Q4 2022.