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Eurozone will avoid recession.

 The euro­zone eco­nomy grew in the final quarter of 2022 des­pite eco­nom­ists’ pre­dic­tions of a down­turn, boost­ing hopes that the region will avoid a reces­sion. Milder weather and gov­ern­ment sup­port

Eurozone

cush­ioned the impact of soar­ing energy prices, help­ing the region’s eco­nomy expand by 0.1 per cent between the third and fourth quarter, accord­ing to data from Euro­stat yes­ter­day. The expan­sion was bet­ter than the 0.1 per cent drop fore­cast by eco­nom­ists polled by Reu­ters. The latest data mean the region man­aged to grow in each quarter of 2022 and by 3.5 per cent over the year.

John Leiper, chief invest­ment officer at Titan Asset Man­age­ment, said the fig­ures were «quite an achieve­ment» given the head­winds facing the region. Busi­nesses and house­holds also had to con­tend with higher bor­row­ing costs, as the European Cent­ral Bank raised interest rates by 2.5 per­cent­age points over the second half of last year to curb infla­tion that peaked at 10.6 per cent. The ECB will assess Yes­ter­day’s fig­ures as it seeks to ensure that infla­tion returns to its 2 per cent goal. Mar­kets expect the gov­ern­ing coun­cil to raise the bench­mark deposit rate by 0.5 per­cent­age points to 2.5 per cent when it meets tomor­row.

The cent­ral bank’s resolve is also likely to be bolstered by the latest data on prices. France, the euro­zone’s second-largest eco­nomy, grew 0.1 per cent between the third and fourth quar­ters.

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