Eurozone economic growth tumbles
By Pan Pylas |
November 13, 2010, Saturday
|
Print Edition
Print Edition
ECONOMIC growth in the 16 countries that use the euro fell by more than half in the third quarter of this year, official figures showed yesterday, as the pace of recovery in Germany, Europe's biggest economy, slowed and the Netherlands saw output unexpectedly drop.
Eurostat, the European Union's statistics office, said economic growth in the eurozone eased to 0.4 percent in the July-September quarter from the 1 percent expansion recorded in the previous three month period. It's also slightly lower than market expectations for a more modest slowdown to 0.5 percent.
The figures also mean that the eurozone economy grew at a slower pace than the United States in the third quarter after a stronger performance in the previous three month period.
The US economy grew at an annualized rate of 2 percent in the third quarter, which according to Eurostat corresponds to a quarterly rate of 0.5 percent.
The figures once again highlight the big disparities within the eurozone - while the core countries, such as Germany and France, continue to grow solidly, albeit at a slower pace, debt-laden Greece remains mired in recession.
Earlier, Germany's Federal Statistical Office reported that economic growth in the country slipped back to a still-healthy and broader-based 0.7 percent following a spectacular 2.3 percent boom in the previous three month period. Meanwhile, French growth eased to 0.4 percent from 0.7 percent.
In contrast, Greece shrank a further 1.1 percent in the third quarter as the government continues to enact austerity measures in an attempt to get a handle on the country's massive debts.
Other countries just staggered - Italy saw its growth rate half to 0.2 percent while the Netherlands unexpectedly saw output dip by 0.1 percent.
Jennifer McKeown, senior European economist at Capital Economics, said the contraction in export-reliant Netherlands was a "worrying sign" that the slowdown in the global economic recovery wanes and the euro's recent strength is starting to take their toll on some of the core economies.
"This is probably a sign of things to come for Germany, where the industrial surveys point to a sharp slowdown," McKeown said. "With the periphery looking worse and worse, we still see the eurozone's recovery grinding to a halt next year."
The split within the eurozone, which could well be compounded further in the coming months by the austerity programs being pursued in a number of countries on the so-called periphery, such as Portugal and Ireland, is likely to make policy-making more difficult, particularly for the European Central Bank.
Eurostat, the European Union's statistics office, said economic growth in the eurozone eased to 0.4 percent in the July-September quarter from the 1 percent expansion recorded in the previous three month period. It's also slightly lower than market expectations for a more modest slowdown to 0.5 percent.
The figures also mean that the eurozone economy grew at a slower pace than the United States in the third quarter after a stronger performance in the previous three month period.
The US economy grew at an annualized rate of 2 percent in the third quarter, which according to Eurostat corresponds to a quarterly rate of 0.5 percent.
The figures once again highlight the big disparities within the eurozone - while the core countries, such as Germany and France, continue to grow solidly, albeit at a slower pace, debt-laden Greece remains mired in recession.
Earlier, Germany's Federal Statistical Office reported that economic growth in the country slipped back to a still-healthy and broader-based 0.7 percent following a spectacular 2.3 percent boom in the previous three month period. Meanwhile, French growth eased to 0.4 percent from 0.7 percent.
In contrast, Greece shrank a further 1.1 percent in the third quarter as the government continues to enact austerity measures in an attempt to get a handle on the country's massive debts.
Other countries just staggered - Italy saw its growth rate half to 0.2 percent while the Netherlands unexpectedly saw output dip by 0.1 percent.
Jennifer McKeown, senior European economist at Capital Economics, said the contraction in export-reliant Netherlands was a "worrying sign" that the slowdown in the global economic recovery wanes and the euro's recent strength is starting to take their toll on some of the core economies.
"This is probably a sign of things to come for Germany, where the industrial surveys point to a sharp slowdown," McKeown said. "With the periphery looking worse and worse, we still see the eurozone's recovery grinding to a halt next year."
The split within the eurozone, which could well be compounded further in the coming months by the austerity programs being pursued in a number of countries on the so-called periphery, such as Portugal and Ireland, is likely to make policy-making more difficult, particularly for the European Central Bank.
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