Eurozone dips into recession

The eurozone economy entered into a technical recession during the first three months of the year according to figures released by the EU's statistic agency, Eurostat.

The data released on Thursday showed that there had been contraction of 0.1% for a second consecutive quarter.

Growth forecasts revised down

Eurostat revised down an earlier forecast that had predicted slight growth, after Germany said last month it had fallen into recession.

Inflation and higher interest rates have lowered demand in the countries that use the euro as their currency.

The latest figures also highlight the impact of the loss of Russian natural gas which caused energy prices to soar.

The worse-than-expected figures casts doubt on more optimistic forecasts for the remainder of 2023.

In May the European Commission predicted growth for the rest of the year across the Eurozone.

Economic development in eurozone countries varied with Luxembourg achieving the strongest quarterly growth with 2.0% and Portugal with 1.6%.

Sharp declines were registered in Ireland, with a drop of 4.6%, Lithuania was dow 2.1%, and Germany's quarterly GDP fell by 0.3%.

Eurostat unemployment figures from March however show that European labor markets have been resilient to the economic barrage.

Unemployment is at its lowest level since the creation of the euro in 1999, coming in at 6.5% in March.