Eurozone: Euro area exits longest recession in its history
September 3, 2013
In the second quarter, Eurozone GDP expanded 0.3% over the previous period (Q1: -0.2% quarter-on-quarter). The result was in line with the flash estimate released by the statistical office (Eurostat) on 14 August. More detailed estimates confirm the positive economic growth in Q2, which ended the streak of six consecutive contractions - the longest recession in the Euro area's history. On an annual basis, the economy contracted 0.5%, halving the 1.0% drop recorded in the previous quarter.
The rebound stemmed from stronger domestic demand and an improvement in the external sector. Private consumption rose 0.2% over the previous quarter, which contrasted the 0.2% drop recorded in Q1. Fixed investment rebounded from a 2.2% decrease in Q1 to a 0.3% increase in Q2, the strongest reading in the last nine quarters. Overall, domestic demand rose 0.1% over the previous quarter, which contrasted the 0.2% fall recorded in Q1.
Exports of goods and services rose 0.8% over the previous quarter, rebounding from the 0.5% fall observed in Q1. Meanwhile, imports fell 0.6% (Q1 2013: +0.5% quarter-on-quarter). As a result, the contribution from net exports to overall growth rose from zero percentage points in Q1 to 0.2 percentage points in Q2.
FocusEconomics Consensus Forecast panelists expect the economy to contract 0.1% in 2013, which is unchanged from last month's forecast. For 2014, panellists expect the economy to expand 1.1%.
Author: Armando Ciccarelli, Head of Data Solutions