Oliver Mangan: For the ECB, inflation remains too high
ECB president Christine Lagarde indicated last Thursday that the central bank has more ground to cover in tightening policy. File picture: Michael Probst/AP
The eurozone economy has lost considerable momentum since last summer. GDP fell by 0.1% in the final quarter of 2022 and again in the opening quarter of 2023, with the economy thus entering a technical recession.
The squeeze on real household incomes, from elevated levels of inflation and higher interest rates, has weighed on consumer spending, while exports have weakened in the face of slower global growth. However, there has been a marked variation in the performances of the larger Eurozone economies over the past year. The heavily energy-reliant and export-orientated German economy has lagged well behind the others, with GDP declining by 0.5% in the final quarter of last year, and 0.3% first quarter of 2023, to leave it down by 0.5% on the year-earlier level.
