Eurozone recovery stalls in final quarter as Germany flatlines
Eurozone recovery stalls in final quarter as Germany flatlines
Friday 12th February 2010
Germany's economy faltered in the final quarter of 2009, with GDP figures showing no growth, dragging down the entire eurozone overall as a result.However, France reported healthy figures for the same quarter, making up for other countries which dragged on the overall figure.
The GDP figures come as eurozone leaders attempt to aid Greece with its debt crisis. The figures showed Greece's economy shrank by 0.8 per cent, the eurozone as a whole saw overall GDP drop 4.0 per cent in 2009, in line with expectations.
The 16-country currency area's GDP rose 0.1 per cent in the final quarter of 2009 compared with the previous quarter. Germany's GDP was unchanged, while France's GDP was up 0.6 per cent. The eurozone's economy grew 0.1 per cent for the quarter, compared to the previous quarter where it grew 0.4 per cent.
The figures, although estimates, also saw Italy's economy shrink 0.2 per cent.
Howard Archer, chief UK and European economist at IHS Global Insight said following the news: "While it is clear that the eurozone economy has been finding it very difficult to kick on after exiting recession in the third quarter of 2009, it had been hoped that the fourth quarter growth rate would be similar to the 0.4 per cent quarter-on-quarter expansion achieved in the third quarter.
"Consequently, eurozone GDP was still down 2.1 per cent year-on-year in the fourth quarter of 2009, although at least this was a marked improvement on the record drop of 5.0 per cent suffered in the first quarter.
"The marked slowdown in Eurozone growth in the fourth quarter of 2009 was largely due to the German economy disappointingly stagnating and Italy contracting anew."
Looking ahead, Mr Archer said: "While we do not expect the eurozone to relapse back into recession, GDP growth of just 0.1 per cent quarter-on-quarter in the fourth quarter of 2009 highlights the fact that the region still faces very challenging economic and financial conditions.
"Economic activity will be hampered by the withdrawal of some stimulus measures, including car scrappage schemes and employment support measures.
"The very disappointing fourth-quarter 2009 GDP data reinforce our suspicion that the eurozone will find it difficult to grow by more than one per cent in 2010."
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