eurozone drops back into recession

The eurozone has returned to recession after official data suggested the currency bloc’s economic growth contracted for a second quarter running.

eurozone drops back into recession


Preliminary figures published by Eurostat, the European Union’s statistical office, showed the GDP of the 17-nation region shrank by 0.1% during the third quarter of 2012. This follows the 0.2% contraction reported in the second quarter.

The Netherlands showed the strongest decline over the three-month period, with its economy shrinking by 1.1%. This was higher than expected, as some economist forecasted a contraction of about 0.2%.

Germany and France, the eurozone’s two largest economies. managed to grow during the quarter, with both expanding by 0.2%. France’s growth was higher than expected although Germany’s slowed from the 0.3% seen over the previous quarter.

Jennifer McKeown, senior European economist at Capital Economics, said: “Despite continued growth in Germany and France, the eurozone as a whole is now officially in recession.

“With austerity starting to hit French households and German unemployment beginning to rise, the outlook for domestic spending is bleak even in the core.”

Eurostat’s data also showed that the wider EU grew by 0.1% over the third quarter, following a 0.2% contraction in the second.


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