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Eurozone is 'exiting recession' Eurozone is 'exiting recession'
(9 minutes later)
The eurozone is emerging from recession, according to the latest forecast from the European Commission.The eurozone is emerging from recession, according to the latest forecast from the European Commission.
"The economy appears to be at a turning point," the commission said."The economy appears to be at a turning point," the commission said.
It forecast growth of 0.2% for the July to September quarter, with Germany and France continuing to grow and Italy exiting recession.It forecast growth of 0.2% for the July to September quarter, with Germany and France continuing to grow and Italy exiting recession.
The commission also forecast the UK economy, which is outside the eurozone, to grow by 0.2% during the third quarter, marking the end of recession. The commission also forecast the UK economy, which is outside the eurozone, would grow by 0.2% during the third quarter, marking the end of recession.
Separately, official figures showed that eurozone industrial production fell by 0.3% in July compared with the previous month.Separately, official figures showed that eurozone industrial production fell by 0.3% in July compared with the previous month.
THIRD-QUARTER FORECASTS Germany 0.7%France 0.4%Italy 0.2%UK 0.2%Spain -0.4%Netherlands -0.4% Source: European CommissionTHIRD-QUARTER FORECASTS Germany 0.7%France 0.4%Italy 0.2%UK 0.2%Spain -0.4%Netherlands -0.4% Source: European Commission
Other figures showed that the number of people employed in the 16 countries that use the euro fell by 702,000 between April and June compared with the previous three months, a fall of 0.5%.Other figures showed that the number of people employed in the 16 countries that use the euro fell by 702,000 between April and June compared with the previous three months, a fall of 0.5%.
'Weak economy''Weak economy'
"The economic situation has improved markedly since the second quarter, pointing to a better growth outlook for the second half of the year," the commission said."The economic situation has improved markedly since the second quarter, pointing to a better growth outlook for the second half of the year," the commission said.
It added that the improved economic outlook was due to "unprecedented" government stimulus that had helped to boost overall economic activity.It added that the improved economic outlook was due to "unprecedented" government stimulus that had helped to boost overall economic activity.
These stimulus packages should be kept in place throughout next year to ensure recovery, said European Union Monetary Affairs Commissioner Joaquin Almunia.These stimulus packages should be kept in place throughout next year to ensure recovery, said European Union Monetary Affairs Commissioner Joaquin Almunia.
But Mr Almunia did warn that "the weak economy will continue to take its toll on jobs and public finances".But Mr Almunia did warn that "the weak economy will continue to take its toll on jobs and public finances".
There are fears that a recovery could stall when government stimulus packages come to an end.There are fears that a recovery could stall when government stimulus packages come to an end.
Commenting on the commission's forecast, HSBC analyst Janet Henry said: "This is a turning point in the global cycle. I think we will see GDP start to turn positive in the third quarter.Commenting on the commission's forecast, HSBC analyst Janet Henry said: "This is a turning point in the global cycle. I think we will see GDP start to turn positive in the third quarter.
"But I think there is still some doubt about how much is driven by temporary stimulus and how sustainable the recovery will be.""But I think there is still some doubt about how much is driven by temporary stimulus and how sustainable the recovery will be."
'Gradual recovery''Gradual recovery'
Earlier this month, the European Central Bank (ECB) also raised its forecast for economic growth.Earlier this month, the European Central Bank (ECB) also raised its forecast for economic growth.
The ECB said the eurozone economy would contract between -4.4% and -3.8% this year.The ECB said the eurozone economy would contract between -4.4% and -3.8% this year.
The head of the bank said the eurozone economy was entering a period of "stabilisation and gradual recovery".The head of the bank said the eurozone economy was entering a period of "stabilisation and gradual recovery".
The eurozone's two biggest economies, Germany and France, have already emerged from recession.The eurozone's two biggest economies, Germany and France, have already emerged from recession.