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Eurozone slumps into recession for first time

©

Video by Raphaël KAHANE

Text by AFP

Latest update : 2008-11-15

The economy of the 15 countries sharing the euro common currency has sunk into a recession for the first time ever. According to official figures, eurozone GDP fell by 0.2% in both the second and third quarters.

The economy of the 15 nations sharing the euro has slumped into recession for the first time ever, EU data released Friday revealed, with GDP falling 0.2 percent in the second and third quarters.

The 27-nation EU as a whole avoided the same fate only by recording zero, rather than negative, growth in the second quarter

On a 12-month comparison, the eurozone economy grew 0.7 percent in the third quarter, down sharply from 1.7 percent in the previous quarter, the official Eurostat agency said.

The announcement in Brussels confirmed widely held fears that the eurozone had fallen into recession for the first time since its formation in 1999.

"Not only did the third quarter contraction in GDP (gross domestic product) confirm that the eurozone is now in recession but latest data and survey evidence indicate that the fourth quarter is likely to see a sharper fall in GDP as the financial crisis bites harder," said Howard Archer, chief European economist at Global Insight.

Germany, Europe's largest economy, is the deepest in the recession mire, according to the figures, with its economy contracting by 0.2 percent in the third quarter of 2008 after falling 0.4 percent in the previous three months.

Italy joined Germany in the recession club on Friday.

Two consecutive quarters of falling gross domestic product (GDP) is the formal definition of recession.

France, the eurozone's second-largest economy, narrowly avoided the 'R' word, with its economy scraping out a 0.1 percent increase in the July-Spetember third quarter.

"There is no denying that the third quarter contraction was a genuine reflection of the downturn across the region," said Archer.

Date created : 2008-11-15

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