Following news that the Eurozone is in decline for a fifth consecutive quarter, analysts are saying that recovery may be some distance off.
Petr Zemcik, Director of economic research at Moody’s Analytics:
The euro zone performance is mainly driven by its four biggest economies which all contracted. Germany’s output declined 0.6% q/q and France’s fell 0.3% q/q. GDP fell 0.8% q/q in Spain and 0.9% q/q in Italy. High-frequency data suggest the euro zone economy is also likely to shrink in the current quarter.
Rising unemployment has been the major drag on consumer spending. The jobless rate rose to 11.9% in January from 11.8% a year earlier. The unemployment rate has been above 11% over a year.
Howard Archer, Chief UK + European Economist at IHS Global Insight:
While Eurozone economic activity saw its low point around last October, we suspect that growth will remain a struggle for some time to come. Indeed, it is looking increasingly likely that the Eurozone could suffer further contraction in the first quarter of 2013, despite a probable return to growth in Germany. We expect Eurozone GDP to edge down by 0.3% overall in 2013, despite likely eking out marginal growth in the second half of the year.
Tim Ohlenburg, senior economist at the Centre for Economics and Business Research:
In the five years since the onset of the financial crisis in 2008, output has shrunk in 10 out of the 20 quarters. That balance will tilt in recession's favour from next quarter onwards and we expect the output declines to persist throughout the year. It is likely to take until 2017 for the region to regain its pre-crisis output. In other words, the Eurozone is in the middle of a 'lost decade' in terms of economic growth.
This comment from January, when European Comission president José Barroso told us Eurozone recovery was apparent:
Where? Where?????? -- EU's Barroso says the economy is starting to climb out of recession— Fabrizio Goria (@FGoria) January 30, 2013