THE eurozone has plunged deeper into recession, with German exports and investment collapsing, and France suffering its longest downturn in 60 years. The 16-nation single currency zone shrank by 2.5 per cent in the first three months of the year compared with the previous quarter. It is the worst performance since records began in 1995, and a more severe decline than economists had expected.
Compared with a year ago, the eurozone's gross domestic product (GDP) fell by a record 4.6 per cent, according to the European Union's statistics office, Eurostat. Taken as a whole, the 27-nation European Union shrank by 2.5 per cent in the first quarter. Analysts believe the recession reached its deepest point during the quarter, although economic recovery is not expected until next year.
Germany's export-driven economy, which has been battered by the collapse in world trade, is at the centre of the eurozone slump. It suffered its biggest quarterly decline on record, the worst in at least four decades.
Europe's biggest economy shrank by 3.8 per cent on the quarter and by 6.9 per cent on a year ago. Germany's federal statistical office said it was the biggest drop since it began compiling quarterly figures in 1970.
The decline, driven by falls in exports and investment, marks the fourth quarter of contraction, Germany's longest slump on record. The economy shrank by 2.2 per cent in the fourth quarter of last year and by 0.5 per cent in each of the two previous quarters.
France, the eurozone's second-biggest economy, contracted by 1.2 per cent in the first quarter and Italy, the next biggest economy, shrank by 2.4 per cent.
Before Friday, France was the only major European economy not to have officially fallen into recession. But its statistics office has now revised down French GDP figures for last year, admitting that the economy has actually been shrinking since the second quarter of 2008. France last suffered four quarters of contraction in a row in 1949. French economy is now set to shrink by three per cent this year.
— The Guardian, London
