The economy in the euro area has grown surprisingly recently and is therefore not headed towards recession for the time being.

The gross domestic product (GDP) rose from October to December by 0.1 percent compared to the previous quarter, as reported by the European statistical office Eurostat on Tuesday.

Experts surveyed by Reuters had expected a drop of 0.1 percent.

In the summer, the economy grew by 0.3 percent.

In 2022 as a whole, which was economically overshadowed by the Ukraine war, GDP growth was at least 3.5 percent.

However, the erosion of purchasing power caused by record high inflation left clear signs of slowing down in the final quarter, says economist Christoph Weil from Commerzbank.

"In the first half of 2023, the economy will probably even shrink slightly," predicts the expert.

Because then, in his view, the noticeable interest rate hikes by the European Central Bank (ECB) should gradually take effect.

Even if the economic prospects brightened again from the summer months onwards, according to VP Bank chief economist Thomas Gitzel, not too much should be expected from 2023: "The real wage losses will continue to weigh on private consumption for a long time to come."

It doesn't work in German retail

The German retail sector is also not looking at the current financial year without concern: sales are likely to grow by two percent, as forecast by the German Retail Association (HDE).

Adjusted for inflation (real), however, it is likely to fall by three percent and thus significantly more than in 2022. "The retail trade will hold its own well in 2023 under conditions that are still difficult, but will lose some ground," said HDE President Alexander von Preen at the presentation of the new forecasts.

At the end of last year, Germany already proved to be a brake on the economy of the euro area: while France remained on the growth track with a plus in GDP of 0.1 percent and Spain even managed growth of 0.2 percent, GDP in this country shrank by 0. 2 percent.

This was mainly due to falling consumer spending, whose purchasing power is suffering from the sharp rise in prices.

Economic output also went down in Italy: by 0.1 percent.

The decline in domestic demand in particular had a negative impact.

The Ministry of Finance in Rome has already prepared for a recession: in November it estimated that the economy will also contract in the first quarter of 2023 after a downturn at the end of 2022.

Federal Economics Minister Robert Habeck (Greens) also expects a lot of headwind for this year, so that only slight growth of 0.2 percent can be expected in 2023.

The Ministry is expecting better figures from spring.

According to the current forecast by the International Monetary Fund (IMF), Germany is likely to perform poorly in 2023 compared to other EU countries.

The IMF predicts only a slight increase of 0.1 percent.

France is expected to grow far more strongly with a forecast increase of 0.7 percent.

According to the IMF, Italy (forecast: 0.6 percent) and Spain (1.1 percent) will also develop better than Germany.

According to the fund, GDP growth of 0.7 percent is possible for the entire euro zone in 2023.