The European Union is experiencing positive economic growth in the first quarter of this year, with major economies such as Germany and France seeing expansion. Germany, the bloc’s largest economy, recorded a 0.2 percent growth in GDP after two consecutive quarters of contraction. France also had a 0.2 percent growth in GDP, while Spain and Portugal saw impressive 0.7 percent growth each. Italy’s economy picked up speed, expanding by 0.3 percent compared to 0.1 percent in the previous quarter.
While services have been a major driver of the economic upturn, there are signs of stabilization in industrial production, which was impacted by soaring energy prices in 2022. German business confidence has been steadily increasing throughout the year, as measured by the Ifo institute. This optimism has not yet translated into a strong recovery, but 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
