One-euro coins on the flag of the European Union – illustrative photo.
Brussels/Prague – The economy of the European Union stagnated in the fourth quarter, so the gross domestic product (GDP) did not change compared to the previous three months, according to seasonally adjusted data. In its detailed report, the statistical office Eurostat stated this today, confirming the quick estimate from the end of January. However, the Czech Republic is in recession, its economy fell by 0.3 percent. Of the countries from which data is available, only Hungary and Finland are in recession.
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In countries paying with the euro, the economy grew by 0.1 percent, which is also in line with the first estimate. In the third quarter, growth in the eurozone was 0.3 percent, the same as in the EU as a whole.
In a year-on-year comparison, the growth of the EU economy slowed to 1.8 percent in the fourth quarter from 2.5 percent in the third quarter. Similarly, in the eurozone, the pace slowed to 1.9 percent from 2.3 percent in the previous quarter. The data for the eurozone include 19 countries, as Croatia only joined the eurozone on January 1 this year.
Eurostat still does not have complete data, missing data from five countries. Of the twenty-two for which data is already available, the Czech Republic, Hungary and Finland are in economic recession. A recession is usually defined as two consecutive quarters of economic decline. The Czech economy fell by 0.2 percent in the third quarter, Eurostat reported.
“The main reason for the weaker result of the Czech economy was very high inflation, which reduced the real purchasing power of the population to a record level. The income of the population lagged behind the increase in prices, and this was followed by a reduction in household consumption,” Creditas Bank chief economist Petr Dufek told ČTK. “Expenditures for goods and services fell, which at the same time did not manage to return to the pre-covid level. From the point of view of the sector, the reduction of consumption was mainly seen in sales in retail, hotels and restaurants,” he added.
The European Union thus, in the fourth quarter it performed worse than the United States, where the economy, using the EU calculation methodology, grew by 0.7 percent compared to the previous three months. It thus slowed down from the quarter-on-quarter pace of 0.8 percent in the third quarter. In a year-on-year comparison, however, growth in the US was slower. The United States uses a different methodology, recalculating the data for the entire year.
