The Eurozone economy contracted by a worse-than-expected 2.5 percent during the first quarter, its deepest slump on record since 1995. Dragged down by German output, Europe has blundered deeper into recession than the United States.
AFP - The 16-nation eurozone contracted a record 2.5 percent in the first quarter as Europe lurched deeper into recession than the United states, an official EU estimate showed on Friday.
The eurozone suffered its deepest slump on records going back to 1995 in the first quarter as the economy shrank 4.6 percent over one year, according to the Eurostat data agency in a first estimate.
Even though the downturn first emerged across the Atlantic, the downturn in Europe proved to be even more dramatic than in the United States, where the economy shrank 1.6 percent over one quarter and 2.6 percent over one year.
The eurozone slump was much worse than expected, with economists forecasting a contraction of 2.2 percent over one quarter and 4.1 percent over one year.
It also marked a dramatic turn for the worse at the start of the year after the eurozone economy contracted 1.6 percent over one quarter in the final three months of 2008 and 4.4 percent over one year.
The broader 27-nation European Union was not spared the pain of a deep downturn with its combined economy shrinking a record 2.5 percent and 4.4 percent over one year.
Germany led the way deeper into recession as Europe's biggest economy shrank a stunning 3.8 percent and 6.9 percent over one year in a sharp deterioration.
However, Italy was not far behind with its economy contracting 2.4 percent and 5.9 percent over one year while the French economy officially entered recession as it shrank 1.2 percent and 3.2 percent over one year.
"At least though, this should mark the nadir in the eurozone's recession as there are mounting signs that the rate of contraction is now moderating," IHS Global Insight economist Howard Archer said.
"Nevertheless, we suspect that actual growth remains some way away with the result that eurozone GDP (gross domestic product) could well contract by as much as 4.5 percent this year," he added.
Date created : 2009-05-15