Eurozone Recession Deepened in Final Quarter of 2012
From Market Curator
The economies of the 17 countries which make up the eurozone shrank more than expected in the final quarter of 2012, according to official figures
Germany, France and Italy led pack downwards, each seeing larger than expected contractions. Across the eurozone the fourth quarter saw a 0.6% contraction, deepening an already painful recession. This was matched by Germany, which also saw a 0.6% contraction after being hit hard by declining exports – this made it the worst quarter for Europe’s powerhouse economy since the start of the economic crisis.
“Comparatively weak foreign trade was the decisive factor for the decline in the economic performance at the end of the year: in the final quarter of 2012 exports of goods declined significantly more than imports of goods, ” said a statement from the German statistics office.
France saw its economy shrink by 0.3%, whilst Italy suffered a 0.9% contraction.
The surprise bad news sent the Euro down against the dollar, falling to a low of $1.3320.
The poor growth figures are in stark contrast to other recently revealed indicator which seem to suggest that the Eurozone is returning to growth. In Germany, for example, a January survey showed that business confidence is at its highest level since before the crisis.
Most analyst are expecting the eurozone as a whole to return to weak growth in 2013, but there is a wide gulf between different countries. France seems to be struggling more than most. The January purchasing manager’s index (PMI) surveys showed signs of stabilisation or growth across most of the continent, but a deepening downturn in France. The latest growth figures show that the French economy barely grew at all in 2012, and many are predicting a recession – although the country’s central bank believes that it will just return to growth in the current quarter.