The euro zone has fallen into recession for the fîrst time ever after third quarter figures showed that the economy had shrunk by 0.2 percent.
This follows similar figures produced in the second quarter. Two consecutive quarters of contraction satisfies the technical definition of recession.
The German economy, one of the world’s largest, suffered a 0.5 percent shrinkage, following a 0.4 contraction in the second quarter.
Italy is also in trouble, while the Bank of England suggests the Britain (not in the euro zone) is already in recession.
Senior economist Carsten Brzeski said things could only get worse:
“The prospects for the fourth quarter are quite bad. All leading indicators are pointing downwards, and if you think today’s numbers were bad… the fourth quarter might be a disaster.”
France has managed to stay out of recession. Its economy showed a slight growth, defying most analysts’ forecasts.
Amid the gloom, the European Central Bank was expected to announce aggressive cuts in interest rates soon. EU states might also cut taxes.
Other major economies are not faring much better as the International Monetary Fund predicted the worst global slump in almost three decades.