The European Union saw a positive economic growth in the first quarter of this year, with major economies like Germany and France experiencing expansion. Despite two consecutive quarters of contraction, Germany’s gross domestic product grew by 0.2 percent, while France also recorded a 0.2 percent growth in GDP. Spain and Portugal saw impressive 0.7 percent growth each, and Italy’s economy picked up speed, expanding by 0.3 percent compared to 0.1 percent in the previous quarter.
Services have been a major driver of the economic upturn, but there are also signs of stabilization in industrial production, which was impacted by soaring energy prices in 2022. German business confidence, as measured by the Ifo institute, has been steadily increasing throughout the year. While this optimism has not yet translated into a strong recovery, countries like the Czech Republic and Hungary reported stronger-than-expected growth in the quarter, benefiting from Germany’s manufacturing sector.
Analyst Andreas Rees from Unicredit believes that the positive growth in Germany is a sustainable trend and not just a short-term boost. He expects further moderate growth in the next few quarters due to rising global trade and lower inflation rates compared to the previous year. This indicates that the worst may be behind the European Union in terms of economic challenges.
