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Sunday 31 August 2014

Eurozone slump enters 6th quarter

Published 15/05/2013 | 10:43

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The eurozone is still in recession

The recession across the eurozone has extended into its sixth quarter - longer than the slump that hit the region during the financial crisis of 2008-9.

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Eurostat, the EU's statistics office, said that nine of the 17 eurozone countries are in recession, with France a notable addition to the list. Overall, the eurozone economy contracted 0.2% in the January-March period from the previous quarter.

Although an improvement on the previous quarter's 0.6% decline, it is another unwelcome landmark for the single currency bloc. This recession, though not as deep as the one in 2008, is the longest in the history of the euro, which was launched in 1999. A recession is officially defined as two straight quarters of negative growth.

There was also bad news for the wider 27-country EU, which is also now officially in recession. In the first three months of 2013, its economic output shrank 0.1%, following a 0.5% decline in the previous quarter.

The eurozone has been shrinking since the fourth quarter of 2011. Initially it was just the countries at the forefront of its debt crisis, such as Greece and Portugal that were contracting.

But the malaise is now afflicting the core. Figures showed Germany, the biggest economy, grew by a less-than-anticipated quarterly rate of 0.1%, largely because of a severe winter. However, Germany's paltry growth still allowed it to avoid a recession following the previous quarter's 0.7% fall.

France, Europe's second-largest economy, has not avoided that fate. Figures showed that it contracted by a quarterly rate of 0.2% for the second quarter running.

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