Eurostat: Spanish Economy Still Shrinking
December 9th, 2009
Economic figures released Thursday provided little evidence that the 16 countries that share the euro are enjoying a strong recovery from recession.
Eurostat, the EU’s statistics office, confirmed that the eurozone’s economy grew by 0.4 percent in the July-September quarter from the previous three-month period – unrevised from its previous estimate – and that retail sales were flat in October from the previous month.
According to Eurostat, Greece and Spain remained the only two eurozone countries in recession. Germany, the currency bloc’s biggest economy, posted quarterly growth of 0.7 percent.
The third quarter rise was the first in six quarters and brought to an end Europe’s sharpest recession since World War II. Though the eurozone’s banks were not at the epicenter of the financial crisis that triggered the global economic downturn, the region suffered as demand for its high-value products fell off a cliff.
The EU as a whole, which includes non-euro members such as Britain and Sweden, grew by 0.3 percent, just above the previous estimate of 0.2 percent, while retail sales rose 0.3 percent in October from the previous month. In addition to Greece and Spain, Estonia, Cyprus, Hungary, Romania and Britain continued to see output shrink during the quarter.
The severity of the recession is evident in the annual comparisons – despite the modest third quarter growth, Eurostat said eurozone output was 4.1 percent lower than the year before while the EU’s GDP was down 4.3 percent. However, both were improvements on the 4.8 percent and 5.0 percent contractions recorded in the second quarter.
Despite the modest third quarter improvement, growth is not expected to return to pre-crisis levels for a while yet, meaning the output lost during the recession will take years to be made up.
Thursday’s data comes ahead of the latest policy statement from the European Central Bank.
Analysts expect a number of significant decisions and announcements from the central bank for the 16 countries that share the euro – even though the benchmark rate will likely stay at the record low of 1 percent for months to come.
In particular, they will be looking to see what President Jean-Claude Trichet says in his press conference about liquidity measures introduced to keep the banking system from collapse and to limit the scale of recession.
Story from Forbes
Related Posts
- 2009 Shrinking Spanish Economy
- Spanish Economy Showing Signs of Recovery
- Spanish Economy Minister: Contraction Slowing
