The euro area slipped into a recession in the first quarter of 2023, owing to reduced domestic consumption in the circumstances of higher borrowing costs, according to the latest estimates which the European Union's statistical office Eurostat published on Thursday.

The 20-strong eurozone’s economy shrank 0.1% in the first quarter, in comparison to Q4 2022, when the fall was also 0.1%, revised data show.

The initial estimates put the Q1 2023 GDP in the euro area at +0.1, and they showed that the eurozone’s economy stagnated in Q4 2022.

In the 27-member European Union, the economy grew 0.1% in the first three months of 2023.

According to Eurostat’s figures, state consumption was cut by 1.6% in Q1 2023 compared to Q4 2022 in the EU, and household consumption shrank by 0.3%.

Broken down by country, Ireland’s economy contracted the most, by 4.6% quarter on quarter, followed by Lithuania with – 2.1%.

On the other hand, Croatia’s Gross Domestic Product increased 1.4% in the first three months of 2023 compared to the last three months of 2022.

Portugal saw a rise of 1.6%, and Poland of 3.8%.