Eurozone: Eurozone back in recession for second time in four years
November 15, 2012
In the third quarter, Eurozone GDP dropped 0.1% over the previous period, according to the flash estimate released by the statistical office (Eurostat) on 15 November. The contraction was smaller than market expectations, which had GDP contracting at the same 0.2% pace seen in Q2 and puts the Euro area in a technical recession for the first time since 2009. On an annual basis, the economy contracted 0.6%, which marks a deterioration compared to the 0.5% drop recorded in the previous quarter, and represents the largest drop recorded since the fourth quarter of 2009. Among the major countries in the region, Germany and France were the only ones to experience positive growth. Germany, which accounts for nearly 30% of the Eurozone's output, expanded 0.2%, a slight moderation from the 0.3% expansion recorded in the previous quarter. In France, Q3 GDP rose 0.2% compared to the previous quarter, rebounding from a 0.1% contraction in Q2. In contrast, Spain dropped 0.3% over the previous quarter, marking the largest contraction among the four biggest Euro area economies. Finally, Italy posted a 0.2% drop, which represented an improvement compared to the 0.7% contraction tallied in the previous quarter. Economic activity contracted for a fifth consecutive quarter in both countries.
Author: Armando Ciccarelli, Head of Data Solutions