Final Q1 GDP data shows a sharper-than-expected decline, raising concerns over the bloc’s economic recovery.
Eurozone GDP shrank by 0.2% in the first quarter, final data showed, below the 0.1% growth estimate and reversing a 0.2% expansion in the prior quarter. The contraction signals weakening momentum in the region’s economy amid persistent inflation and tight monetary policy.
Analysts had anticipated a modest rebound after the previous quarter’s stagnation, but the decline underscores challenges in domestic demand and external trade. The data contrasts with recent resilience in labor markets and services activity.
Markets are assessing the implications for European Central Bank policy, with rate cuts still expected but timing under scrutiny.