UPDATE - Euro area enters into recession

UPDATES WITH MORE DETAILS; CHANGES HEADLINE, DECK, LEAD

By Tuba Ongun

ANKARA (AA) - The eurozone economy entered into a small recession as revised data shows two quarters of GDP contraction, data by EU’s statistical office showed on Thursday.

The euro area's gross domestic product (GDP) unexpectedly fell 0.1% in the first quarter of 2023, compared to the previous three-month period, according to the second reading from Eurostat.

Eurostat also revised the 2022 fourth quarter data to post a 0.1% decline in the euro area and by 0.2% in the EU.

Eurozone economy was initially estimated to grow 0.1% quarter-on-quarter in January-March. Market forecast single currency zone economy to stagnate in three months to March.

The GDP in the EU, on the other hand, rose 0.1% compared to the previous quarter.

Household expenditure decreased by 0.3% in both the euro area and the EU, dragged down by persistent inflation and high borrowing costs.

Public spending fell 1.6% in the euro area and by 0.9% the EU.

Exports and imports dropped by 0.1% and 1.3%, respectively, in the same period.

Poland saw the largest growth among member states with 3.8%, compared to the previous quarter in January-March, followed by Luxembourg (2.0%) and Portugal (1.6%).

On the contrary, Ireland's economy contracted the most with its GDP going down by 4.6% quarter-on-quarter. It was followed by Lithuania (minus 2.1%) and the Netherlands (minus 0.7%).

On an annual basis, both the euro area and EU economies expanded by 1% in the first quarter of 2023.

The annual growth slowed from 1.8% in the euro area and 1.7% in the EU, respectively, in the previous quarter.