Eurozone Officially In Recession
EU figures showed that the economy shrank by 0.2% in the third quarter, putting the eurozone officially in a recession. This follows a 0.2% contraction in the 15-nation area in the previous quarter from April to June. Two quarters of negative growth define a technical recession.
The news was widely anticipated and follows data showing that Germany and Italy, two of the biggest eurozone economies, are already in recession.
The figures were not a surprise. As BBC correspondent Steve Rosenberg reported, "The Germans had their gloomy economic news [on Thursday] and as Germany is the dynamo of the European economy, when there are problems there, it drags the rest of the region down with it."
It is the first recession the region has seen since the euro's creation in 1999. But analysts forecast worse to come for the countries that use the euro.
"Looking ahead, we can expect further quarters of negative GDP growth, until the third quarter of 2009, simply because so far we have not had in the GDP figures the full impact of the credit market crisis," said Gilles Moec, senior economist, Bank of America.
"We also haven't yet seen the full impact of unemployment on consumer spending," he added, forecasting that the eurozone region will shrink by 1% next year.
Published on November 14, 2008
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