THE EUROZONE economy has contracted over the past year, official figures revealed yesterday, with industry data showing even Germany has been hit by the dire state of its weaker neighbours’ economies.
Eurozone GDP registered no growth in the first quarter of this year, after falling 0.3 per cent in the fourth quarter of 2011 – narrowly avoiding a technical recession, but nonetheless leaving the economy 0.1 per cent smaller than it was in the first quarter of 2011.
Household consumption was unchanged in the three-month period, following a 0.5 per cent fall in the previous quarter, while fixed capital formation fell 1.4 per cent, faster than the 0.4 per cent previous drop.
Exports jumped one per cent, rebounding from a 0.7 per cent fall in the final quarter of 2011, while imports rose 0.1 per cent after a 1.7 per cent fall earlier.
“This is a recession in all but name,” said economist Howard Archer from IHS Global Insight. “It took a strong net trade performance to prevent the Eurozone contracting in the first quarter, and the currency area cannot rely on this going forward given current heightening global growth concerns.”
Among the largest economies Italy’s GDP fell 0.8 per cent, its third consecutive quarterly drop, while Spain saw a 0.3 per cent drop and France saw no growth. Germany saw 0.5 per cent growth.
However, that German strength may not continue – industrial production fell 2.2 per cent on the month to April, and 0.7 per cent on the year, official data showed yesterday.
Leaders including EC president Manuel Barroso have called for “growth enhancing measures,” but the debt crisis means a state-funded stimulus is not an option.