In level terms euro zone production peaked roughly 6 month after Russia invaded Ukraine and then fell around 7% through October 2023. Germany and energy intensive industries were particularly affected. Over the past four or five months it has been Stabilising as the energy squeeze abates and expectations for rate cuts have grown.
In momentum terms, underlying EZ IP peaked around 4% per annum in early 2022, plunging to minus 8% last spring. It is now back to zero.
Of course, another significant energy shock (whether via the Middle-East, developments in the Ukraine War or a stronger rebound in China) would abort the hoped for recovery in the second half of the year.
