Eurozone’s economic recovery halts in Q2
Print Edition
THE shaky economic recovery in the 18-country eurozone ground to a halt in the second quarter, as the continent’s central pillars — Germany and France — were held back by weaker investment by business and by fears over the crisis in Ukraine.
The German economy, the biggest among the countries that use the euro, shrank by a quarterly rate of 0.2 percent while No. 2 France showed zero growth for the second straight quarter. Italy, the No. 3 economy, shrank.
The outcome reported yesterday by Eurostat, the European Union’s statistics office, was slightly lower than the 0.1 percent growth expected by market analysts. Some analysts had already scrapped more optimistic projections in the days ahead of the announcement amid a run of disappointing economic news.
The figures bring an end to the eurozone’s paltry recovery from its longest-ever recession. Growth, which has been patchy across the region and dependent on Germany, has lasted just four quarters.
The eurozone isn’t the only economy that’s showing signs of losing momentum. On Wednesday, Japan posted a big second quarter drop though that was due to the impact of a new sales tax, while the US has exhibited some weakness of late despite ongoing jobs growth.
While a mild German winter that shifted construction from the second quarter to the first was a key factor behind the underperformance, economists say fears the Ukraine crisis may escalate are making companies in Europe hesitate to invest and consumers to postpone spending.
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