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Eurozone narrowly misses double dip recession


Eurozone narrowly misses double dip recession


The eurozone avoided recession in the early part of this year, but only just, and that was thanks to growth of 0.5 percent in Germany from exports.

Stagnation in France and contraction in southern Europe underlined sharp differences around the region which is labouring under the effects of austerity measures.

Overall gross domestic product was unchanged in the first quarter following a 0.3 percent dip at the end of last year. Most economists had expected a 0.2 percent contraction.

That means the eurozone missed slipping into recession by the narrowest possible margin. The “official” definition of a recession is two consecutive quarters of economic contraction.

Optimism at the start of the year that the eurozone would recover quickly in 2012 has been crushed by unexpected contractions in consumer confidence, business morale and manufacturing.

“Germany is leading the bloc, but this doesn’t mean we will have a strong rebound. Austerity is not going away and southern European economies are really struggling,” said Mads Koefoed, a senior economist at Saxo Bank. “We are looking at stagnation to very mild growth in the year to come.”

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