The European Union saw growth in its economy in the latest quarter, with Germany, the largest economy in the bloc, leading the way. Germany’s GDP expanded by 0.2 percent, reversing the contraction seen in the previous two quarters. France also saw growth of 0.2 percent, and Spain and Portugal showed impressive growth of 0.7 percent each. Italy’s economy accelerated by 0.3 percent, an improvement from the 0.1 percent growth in the previous quarter of 2023.
While services were mainly responsible for the economic upturn, there have also been positive signs of stabilization in industrial production. The industrial sector had been negatively affected by energy price increases in 2022, but recent data suggest a recovery is underway. German business confidence has been increasing throughout the year, as reported by the Ifo institute. The Czech Republic and Hungary, which have manufacturing sectors closely tied to Germany’s, both reported stronger-than-expected growth in the quarter.
According to Unicredit analyst Andreas Rees, the positive growth seen in Germany is not just a temporary improvement. He believes that the worst is behind us, and rising global trade combined with lower inflation rates compared to last year will likely lead to further moderate growth in the coming quarters.