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Mixed fortunes as three European economies reveal post-Ukraine invasion GDP

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By Joshua Askew  with AFP
Containers are being moved in the harbor of Rotterdam, Netherlands, Wednesday, March 23, 2022.
Containers are being moved in the harbor of Rotterdam, Netherlands, Wednesday, March 23, 2022.   -   Copyright  Peter Dejong/Copyright 2022 The Associated Press. All rights reserved

Three European economies are weathering the current turmoil in very different ways, according to the GDP growth figures for 2022 published on Tuesday.

The Eurozone has recorded an overall inflation rate of 8.1 per cent for the first quarter of 2022, the highest figure since records began in 1997. But France, Italy and Switzerland experienced negative, neutral and positive economic growth respectively in that time.

In what was labelled a "storm warning" by AFP, the French economy contracted 0.2 per cent in the first four months of the year, according to the country's own National Institute of Statistics. 

Italy unexpectedly recorded a 0.1 per cent increase in GDP between January and April 2022, after initial data showed a decline of 0.2 per cent. And thanks to a strong industrial recovery and surging demand for its exports, the Swiss economy grew by 0.5 per cent compared to the pervious quarter. 

GDP measures the value of all the goods and services produced in a country in a given year. An ideal growth rate in an advanced economy is considered to be two to three per cent per year.

At the moment, however, economies across Europe are being battered by a cost of living crisis, the effects of Russia's ongoing war in Ukraine and ensuing sanctions, and the enduring impact of COVID-19.

France's economic gloom was caused by a pronounced fall in household consumption, the traditional engine of the country's growth, of some 1.5 percent. Families are spending less at a time of high inflation, which climbed to 4.5 percent in the same period.

"We know prices are being pulled up both by the situation in the energy market, and also by the situation in the food market," France's Economy Minister Bruno Le Maire warned on Monday. He added: "We are going to enter a new period where inflation will no longer be as low as it has been in past years."

Growth in Italy stemmed from solid domestic demand and recent investments that have compensated for declines in exports, the country's National Institute of Statistics said. 

By contrast, the Swiss economy was said to have accelerated due to increased global demand for machinery, metals, precision instruments, watches and jewellery.