For first time ever, Eurozone shrank in all 4 qtrs of a year
15 Feb 2013 5:31 AM IST
The eurozone slipped deeper than expected into recession in the last three months of 2012 after its largest economies, Germany and France, shrank at the end of the year. It marked the currency bloc’s first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, gross domestic product (GDP) fell by 0.5 per cent, according to news agency reports.
Economic output in the 17-country region fell by 0.6 per cent in the fourth quarter, EU statistics office Eurostat said on Thursday, following a 0.1 per cent output drop in the third. The quarter-on-quarter drop was the steepest since the first quarter of 2009.
Within the zone, only Estonia and Slovakia grew in the last quarter of the year and there are no figures available yet for Ireland, Greece, Luxembourg, Malta and Slovenia.
It was the biggest economies that set the tone. Germany contracted by 0.6 per cent on the quarter, official data showed, marking its worst performance since the global financial crisis was raging in 2009, informed news agencies. France’s 0.3 per cent fall was also slightly worse than expectations.
The greatest reported decline was in bailed-out Portugal, down 1.8 per cent. Italy suffered its sixth successive quarterly fall in GDP , this time by a sharp 0.9 per cent, putting it into a longer slump than it suffered in 2008/ 2009. Its recession has been deepened by austerity measures that outgoing Prime Minister Mario Monti introduced to stave off a debt crisis.
Spain, the eurozone’s fourth largest economy, released figures two weeks ago which showed it remained deep in recession after a 0.7 per cent contraction in the fourth quarter. Madrid is also pressing on with austerity measures to cut its debt but may be given more time to meet its deficit targets by the European Commission if its economy worsens further.
Worryingly for Berlin, it was the export performance — the motor of the German economy — that did most of the damage, declining significantly more than imports, although economists expect it to bounce back quickly. The euro hit a session low against the dollar after the weaker than forecast German reading and dropped again after the release of full eurozone figures.
Economic output in the 17-country region fell by 0.6 per cent in the fourth quarter, EU statistics office Eurostat said on Thursday, following a 0.1 per cent output drop in the third. The quarter-on-quarter drop was the steepest since the first quarter of 2009.
Within the zone, only Estonia and Slovakia grew in the last quarter of the year and there are no figures available yet for Ireland, Greece, Luxembourg, Malta and Slovenia.
It was the biggest economies that set the tone. Germany contracted by 0.6 per cent on the quarter, official data showed, marking its worst performance since the global financial crisis was raging in 2009, informed news agencies. France’s 0.3 per cent fall was also slightly worse than expectations.
The greatest reported decline was in bailed-out Portugal, down 1.8 per cent. Italy suffered its sixth successive quarterly fall in GDP , this time by a sharp 0.9 per cent, putting it into a longer slump than it suffered in 2008/ 2009. Its recession has been deepened by austerity measures that outgoing Prime Minister Mario Monti introduced to stave off a debt crisis.
Spain, the eurozone’s fourth largest economy, released figures two weeks ago which showed it remained deep in recession after a 0.7 per cent contraction in the fourth quarter. Madrid is also pressing on with austerity measures to cut its debt but may be given more time to meet its deficit targets by the European Commission if its economy worsens further.
Worryingly for Berlin, it was the export performance — the motor of the German economy — that did most of the damage, declining significantly more than imports, although economists expect it to bounce back quickly. The euro hit a session low against the dollar after the weaker than forecast German reading and dropped again after the release of full eurozone figures.
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