GDP Data Indicates Eurozone Economy Contracts – Germany, France Escape Recession

August 13, 2009

(ChattahBox) — The worst of the global crisis may be coming to an end in Europe, as the gross domestic product in the 16-nation Euro currency bloc, is showing signs of revival. Though  falling 0.1 per cent in April, May and June, economists had expected a decline of 0.5 per cent after a drop of 2.5 per cent in the first quarter of the year, raising hopes that the eurozone’s biggest economies can pull the others out of the worst recession the region has known since the Second World War. The economy for the enite 27-nation European Union as a whole shrank by 0.3% in the second quarter, weighed down in part by a 0.8% drop in Britain, but still significantly better than 2.4%fall seen in the first quarter.

Germany and France technically climbed out of recession expanding by 0.3 percent. Germany, Europe’s biggest economy blew away expectations  reporting a quarter-on-quarter growth rate of 0.3% for the second quarter, instead of the contraction of 0.2% that was expected. The German government like in the United States has aggessively subsidized workers and businesses to stimulate new growth. Like the U.S. though Germany faces liquidity problems going forward and bank lending is still woefully low.

The news is overall heartening but the European Union’s statistics office said seasonally adjusted industrial production fell by month on month 0.6 per cent in June and economists have also expressed concern that unemployment in the eurozone will rise in the coming months as the economic fallout from the global recession slowly catches up with the currency bloc’s labor market.

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One Response to “GDP Data Indicates Eurozone Economy Contracts – Germany, France Escape Recession”

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