Eurozone recession deepens

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The eurozone economy shrank 0.6% in the final three months of 2012, posting its worst performance in almost four years

Recession deepened across the 17 member states as major economies Germany, France and Italy all saw bigger than forecast contractions in the period.

Germany, the eurozone's biggest economy, recorded the biggest slump, with a fall of 0.6%, its most significant contraction since the height of the financial crisis.

France’s output shrank by 0.3% compared to the previous three months, and Italy’s economy contracted 0.9%, more than expected and a sixth consecutive fall.

It marked the currency bloc's first full year in which no quarter produced growth since 1995, and for the year as a whole, GDP fell by 0.5%.

Within the bloc, only Estonia and Slovakia recorded growth in the last quarter of the year.

The British economy also shrank more than forecast in the last quarter of 2012,contracting 0.3%, adding to fears of a triple-dip recession

Yesterday, Sir Mervyn King said there is “recovery in sight” but warned it would not be smooth.  “This hasn't been a normal recession and it won't be a normal recovery,” he added.

Raymond Doherty

 

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