Eurozone Close To End Of 18-Month Double-Dip Recession
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Official figures from Brussels are expected to show on Wednesday a return to modest growth in the second quarter, ending a recession that has gripped the eurozone since late 2011.
On Wednesday, official data is expected to show that economic growth among the 17 countries that use the euro climbed 0.2 percent in the quarter.
Official figures from Brussels are expected to show on Wednesday a return to modest growth in the second quarter, ending a recession that has gripped the eurozone since late 2011.
On Wednesday, official data is expected to show that economic growth among the 17 countries that use the euro climbed 0.2 percent in the quarter.
Preliminary data also showed that the German economy expanded by 0.7 percent in the second quarter, its best performance in more than a year, beating forecasts and suggesting that Europe’s largest and strongest economy will haul the eurozone out of recession.
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German growth was largely driven by an increase in domestic private and public consumption and came after the economy only narrowly avoided a recession earlier this year.
“At least for the time being, the German economy has returned as the big stronghold, not only for the eurozone but this time around even for the global economy,” said Carsten Brzeski, senior economist at ING.
“For the eurozone, this morning’s numbers are also good news. Thanks to Germany, the entire eurozone should have left the record-long recession,” he added.
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France too posted better-than-expected economic growth of 0.5 percent in the second quarter, exiting a mild recession, preliminary data from the INSEE statistics agency showed on Wednesday.
The return to growth followed 0.2 percent contractions in both the final quarter of last year and the first quarter of this year, undermined by record unemployment and government spending cuts.
While the overall rebound is weak, the expansion ends six consecutive quarters of recession – the longest to afflict the single-currency bloc since its creation in 1999.
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Wednesday’s GDP report is the latest to suggest the eurozone is turning the corner, with retail sales, investor confidence and industrial output positive after months of decline.
On Tuesday, data from Eurostat showed that industrial production grew by 1.1 percent from the previous quarter, reinforcing hopes the bloc may have exited recession in the second quarter.
The industrial production data came after the ZEW economic sentiment in Germany, an indicator of investor confidence, rose to 42.0 in August, its highest level since March and better than analysts had expected.
“It looks as if there will be a turning point in the coming weeks. The ZEW proves that,” said Thomas Gitzel at VP Bank.
