Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a697386
Eurozone climbs out of longest ever recession
by James Phillipps on Aug 14, 2013 at 08:43
The eurozone has finally moved out of its longest ever recession driven by better than expected performance from the German and French economies which helped the bloc's GDP rise by 0.3%.
The eurozone's move into positive territory in the second quarter marks a solid turnaround after the region's aggregate GDP fell by 0.3% in the first quarter and dragged the bloc out of a record six quarter slump. German GDP rose by 0.7% in the second quarter while France’s economy grew by 0.5%, both figures comfortably ahead of analysts’ consensus.
'The national GDP figures released this morning confirm that the euro-zone economy emerged from its six-quarter recession in Q2,' said Capital Economics' chief European economist Jonathan Lyons.
Both France and Germany reported an uptick in consumer spending and exports with French manufacturing hitting a 17 month high, while German manufacturing returned to growth. However, Dutch GDP fell by 0.2% and Italy and Spain have already announced their economies contracted by 0.2% and 0.1%, respectively.
But the positive news from the more affluent north is expected to be marred by ongoing weakness in the south in what is set to be a busy day of data releases.
'The indebted countries of the periphery are still mainly in recession and a very long way from the rates of expansion needed even to begin to eat into their enormous debt burdens. The eurozone’s recession may be over – for now at least – but the debt crisis in the periphery is decidedly not,' Lyons added.
Portugal is to swear in its new cabinet later today with incoming economic minister Pires de Lima widely thought to favour softening the impact of austerity measures on the country.
News sponsored by: