Eurozone likely to avoid recession but Germany, Italy still at risk

People stand in front of the Euro sculpture in Frankfurt, Germany, on Aug. 22, 2022. (Xinhua/Shan Weiyi)

Eurostat, the European Union (EU)'s main statistics entity, reported Tuesday that the 19 eurozone economies grew by a modest 0.1 percent in the fourth quarter of 2022 compared with the previous quarter.

ROME, Feb. 14 (Xinhua) -- The eurozone may end up sidestepping the risk of a recession, as data released Tuesday by Eurostat showed positive economic growth in the fourth quarter of last year.

But some countries -- including Germany and Italy, which represent the eurozone's first and third largest economies respectively, are still facing recession risks.

Eurostat, the European Union (EU)'s main statistics entity, reported Tuesday that the 19 eurozone economies grew by a modest 0.1 percent in the fourth quarter of 2022 compared with the previous quarter. The data did not include Croatia, which became the 20th member of the euro area at the very start of this year.

As an economic recession is defined as two consecutive quarters of negative gross domestic product (GDP) growth, and economic forecasts predict European economies will pick up growth rates in the second quarter this year, this indicates the euro area could probably avoid a technical recession.

Customers are seen at a shop in Berlin, capital of Germany, on May 11, 2022. (Photo by Stefan Zeitz/Xinhua)

But that is not the case for all the countries. Six of eurozone countries showed negative economic growth in the fourth quarter of 2022, including Germany and Italy, whose growth declined by 0.2 percent and 0.1 percent respectively.

The two countries were hardest hit by the Ukraine crisis, as both have export-driven economies and depend heavily on natural gas from Russia, which has been disrupted following sanctions against Russia.

In the last three months of 2022, the 27 member countries of the EU reported an average zero growth compared to the previous quarter.

Countries across Europe suffered from high inflation caused by surging energy prices last year. Eurostat's data showed that the inflation rate for the eurozone dipped back into single digit in December, tallying a 9.2-percent. For the EU as a whole, the rate in December was 10.4 percent.

People walk past a money exchange office in Rome, Italy, March 2, 2022. (Xinhua/Jin Mamengni)

The three Baltic states -- Estonia, Latvia and Lithuania -- where Russia's economic influence is strong, reported the highest estimated inflation rates in January, at 18.8 percent, 21.6 percent and 18.4 percent respectively.