Eurozone avoids recession after strong German growth
DHAKA: The eurozone has narrowly avoided returning to recession after recording zero growth in the first three months of the year, figures have shown.
The stronger-than-expected performance was in large part due to growth of 0.5% in the German economy.
In the final quarter of 2011, the eurozone shrank by 0.3%, and many analysts expected further contraction.
The French economy recorded zero growth in the first quarter of 2012, while the Italian economy contracted by 0.8%.
The Italian economy shrank by 0.7% between October and December last year, and it has now contracted for three consecutive quarters.
The country is struggling as the government cuts back on spending, raises taxes and reforms pensions in an attempt to cut debt levels.
The figures from Eurostat also showed that Spain`s economy shrank by 0.3% in the first quarter.
Separately, the Greek national statistics office said the nation’s economy had contracted by 6.2% in the three-month period.
Greece is implementing drastic austerity measures to cut its deficit and comply with the terms of a massive bailout from the European Union and the International Monetary Fund.
The German statistics agency, Destatis, said the country’s economic growth was due to a rise in exports and higher domestic consumption.
The return to growth means Germany has avoided a so-called double-dip recession, confounding the predictions of a number of commentators.
‘This is a very strong comeback. The decline in the fourth quarter was not the start of a recession but just an economic dip’, said Joerg Kraemer at Commerzbank.
‘Germany is faring better than the rest of the eurozone. But I do not believe that it will continue at this speed.’
In contrast, the French growth figures failed to outperform analysts’ expectations, and the growth figure for the final quarter of last year was revised down to 0.1% from 0.2%.
‘There was no good surprise’, said Philippe Waechter at Natixis Asset Management.
BDST: 1918 HRS, May 15, 2012
Edited by Robab Rosan, Cultural Affairs Editor