Eurozone: GDP records sixth consecutive contraction
June 5, 2013
In the first quarter, Eurozone GDP contracted 0.2% over the previous period, confirming the result of the flash estimate released by the statistical office (Eurostat) on 15 May. The contraction was smaller than the 0.6% drop seen in Q4 but marks nonetheless a sixth consecutive contraction in economic activity, the longest recession in the Euro area's history. On an annual basis, the economy contracted 1.1%, which was down from the 1.0% drop recorded in the previous quarter.
The quarterly improvement was driven by a stronger performance in domestic demand. Private consumption rose 0.1% over the previous quarter, which contrasted the 0.6% drop recorded in Q4 and marked the first expansion in the last six quarters. In contrast, fixed investment deteriorated from a 1.4% drop in Q4 to a 1.6% fall in Q1. Overall, domestic demand contracted 0.3% over the previous quarter, which was up from the 0.7% fall recorded in the previous quarter.
Exports of goods and services dropped 0.8% over the previous quarter, which marked a slight improvement from the 0.9% fall observed in Q4. Meanwhile, imports fell 1.1% (Q4 2012: -1.1% quarter-on-quarter). As a result, the contribution from net exports to overall growth was unchanged at 0.1 points.
FocusEconomics Consensus Forecast panellists 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