Euro zone economy growth figures revised
The European Union’s Eurostat agency has today revealed that the euro zone economy contracted by 0.2% in the April to June period – revised from the 0.1% previously reported.
The figures are a major setback to the economy suggesting that the economy, as a whole, may not be exiting recession in the third quarter as hoped.
However, on a positive note, the figures have revealed that Greece, Poland, Portugal and the Czech Republic have all emerged from recession.
Europe’s no.1 and no.2 economies, Germany and France, have already exited recession after experiencing positive growth in the second quarter.
However, on an annual basis, the rate of decline also crept upwards to 4.8% with the fifth consecutive quarter of falling economic output for the area as a whole.
Commenting on the revised figures, IHS Global Insight analyst Howard Archer, said “they do not materially change the picture. It still seems likely that the region returned to growth in the third quarter, albeit modest.”
Mr Archer said he expects euro zone GDP to have grown by around 0.3% quarter-on-quarter in the third quarter.
Meanwhile, the European Central Bank is widely expected to keep interest rates at the historic low of 1% tomorrow as deflation fears ease.
In the meantime, it was reported that exports fell by 1.5% in the euro zone and 1.7% across the EU – worse than expected.
Last week, Eurostat reported that the unemployment rate in the euro zone hit 9.6% in August – the highest in over a decade after the number of jobless rose by 165,000 during the month, bringing the total jobless number using the single currency bloc to 15.17 million.
Spain saw the highest increase in unemployment in the euro zone, rising from 11.8% to 18.9% on an annual basis.
Meanwhile, Ireland’s unemployment rate has nearly doubled to 12.5% on annual basis, while Germany has seen unemployment rise marginally over the year from 7.2% to 7.7%.
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