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Eurozone falls back into recession | |
(35 minutes later) | |
The eurozone has returned to recession as the region's debt crisis continues to hurt demand, latest official statistics show. | The eurozone has returned to recession as the region's debt crisis continues to hurt demand, latest official statistics show. |
The economy of the 17-nation bloc contracted by 0.1% between July and September, after shrinking 0.2% in the previous three months, href="http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-15112012-AP/EN/2-15112012-AP-EN.PDF" >Eurostat said. | |
In comparison the UK grew by 1% in the quarter, while the US grew by 0.5%. | |
The eurozone was last in recession in 2009, when the economy contracted for five consecutive quarters. | |
Analysts said that the eurozone was unlikely to have improved in the current quarter. | |
"We are now talking about the fourth quarter already and there the figures show that things are not looking as good," said Christian Schultz, an economist at Barenberg Bank. | |
Export demand | |
The eurozone's largest economy, Germany, is still growing despite being affected by the debt crisis. | |
Germany's economy grew by 0.2% in the July-to-September period, although this was down from growth of 0.3% recorded in the previous quarter and the 0.5% figure seen in the first three months of this year. | |
The country's growth was driven mainly by "foreign demand", federal statistics office agency Destatis said. | |
Meanwhile, French gross domestic product rose by 0.2% in the third quarter compared with the previous three months. But the previous quarter was revised down to -0.1% from zero, according to French statistics agency Insee. | Meanwhile, French gross domestic product rose by 0.2% in the third quarter compared with the previous three months. But the previous quarter was revised down to -0.1% from zero, according to French statistics agency Insee. |
The production of goods and services in France, Europe's second-largest economy, increased "after five quarters of near stagnation", it said. | The production of goods and services in France, Europe's second-largest economy, increased "after five quarters of near stagnation", it said. |
For the whole of the European Union, which includes countries such as the UK and Sweden, the economy grew by 0.2% in the quarter, after having contracted 0.2% in the previous three months. | |
The economy of the Netherlands shrank 1.1%, adding to signs that the previously-healthy north of Europe is suffering as the southern parts push through more austerity cuts in weak economies. | |
'Negative growth' | 'Negative growth' |
Last month, the German government cut its forecast for economic growth in 2013 from 1.6% to 1%, blaming the reduction on the eurozone crisis and weaker growth in emerging nations in Asia and Latin America. | Last month, the German government cut its forecast for economic growth in 2013 from 1.6% to 1%, blaming the reduction on the eurozone crisis and weaker growth in emerging nations in Asia and Latin America. |
Germany's gross domestic product (GDP) grew by 4.2% in 2010 and 3% in 2011. | Germany's gross domestic product (GDP) grew by 4.2% in 2010 and 3% in 2011. |
"The negative data seen in recent weeks and months could very well lead to negative growth" in Germany in the fourth quarter of the year, said analysts at Natixis Bank. | |
Unlike most of its partners in the 17-nation eurozone, Germany has mainly escaped the worst effects of the crisis that has threatened to unravel the bloc. | Unlike most of its partners in the 17-nation eurozone, Germany has mainly escaped the worst effects of the crisis that has threatened to unravel the bloc. |
Until now, it has benefited from the weaker euro, making its exports more competitive outside the eurozone. | Until now, it has benefited from the weaker euro, making its exports more competitive outside the eurozone. |
However, German consumers are still spending. "Consumption by both private households and government was higher than in the second quarter when adjusted for price, seasonal and calendar variations," Destatis said. | However, German consumers are still spending. "Consumption by both private households and government was higher than in the second quarter when adjusted for price, seasonal and calendar variations," Destatis said. |
Figures released in the past week from the eurozone's hardest hit economies show that the Spanish economy contracted by 0.3% between June and September and Portugal by 0.8%. | Figures released in the past week from the eurozone's hardest hit economies show that the Spanish economy contracted by 0.3% between June and September and Portugal by 0.8%. |
Greece said on Monday that its economy had contracted by 7.2% in the third quarter compared with a year earlier. It did not give a comparison with the preceding three months. | Greece said on Monday that its economy had contracted by 7.2% in the third quarter compared with a year earlier. It did not give a comparison with the preceding three months. |