European Economy Grew 0.2% in Third Quarter; Eurozone Braces for Recession
THE TAKEAWAY: European GDP shows no signs of recovery -> Widespread warning of recession underscored -> Euro continues to drop
Matching economists’ predictions, European GDP grew by merely 0.2% during 2011’s third quarter, which translates to a yearly growth of 1.4%. GDP growth is widely expected to grind to a halt in the fourth quarter, and many officials including ECB President Draghi have warned of impending recession in late 2011 and early 2012.
A breakdown of GDP data in the 17-member bloc showed that the region’s two largest economies Germany and France grew steadily this past quarter, offset by a stall in Spain and Belgium. The Netherlands and Portugal saw contraction, and beleaguered Greece was hardest-hit with a contraction of 5.2% versus the corresponding period last year.
Although the region’s flagship German economy has shown signs of resilience to the widespread crisis, the widely-read German ZEW survey (released together with the EZ GDP) showed weak economic sentiment in Germany and the entire region.
Following the GDP data’s release, the Euro approached monthly lows against the Dollar after hitting a monthly low against the Yen earlier in the day.
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