The Eurozone slipped further into recession in the fourth quarter of last year. Eurostat announced today that GDP fell for the fourth consecutive quarter in the Eurozone and for the second time in the EU27. In the Eurozone GDP decreased by 0.6 percent whereas in the EU27 it dropped by 0.5 percent.
GDP in the EU27 and the Eurozone has been on a falling trend since a peak registered in the second quarter of 2010, in contract with that in the United States which, though it has oscillated up and down, has been consistently better than in Europe.
Out of the 23 member states who reported their GDP, only six registered a monthly quarterly growth. They were Latvia (+1.3%), Estonia (+0.9%), Lithuania (+0.7%), and Poland, Rumania and Slovakia (all with +0.2%). Another 15 saw their GDP drop, the worst being Portugal with -1.8%, whereas two had a stationary GDP.
Not all member states, however, are in a recession (two or more consecutive GDP declines). Those who are include the Czech Republic, Spain, Italy, Cyprus, Hungary , the Netherlands, Portugal, and Slovenia. Some others seem to be teetering on a recession, like Belgium, Bulgaria, Denmark, France, Finland, and the UK.
Compared on an annual basis, GDP fell for the fourth successive quarter in the Eurozone and for the third successive quarter in the EU27. Thirteen member states registered declines, the largest being that of Portugal with a 3.8 percent decrease and the lowest that of Rumania with a 0.1% fall.
Growth in the US and Japanese economies was static on a quarterly basis, but was still growing on an annual basis, with a 1.6 percent increase in the US and a 0.2 percent rise in Japan. Switzerland and Norway also had GDP growths.
Despite a modest recovery in financial confidence, Europe’s real economy remains sick. Forecasts from the IMF in January showed Eurozone GDP shrinking by 0.2% in 2013, following a contraction of 0.4% in 2012. The economic reverse is much deeper on the periphery of the single-currency area than in its core. The disparity between core and periphery is particularly stark in labour markets. Unemployment in Germany was just 5.3% of the workforce at the end of 2012, whereas in Greece and Spain it was over 26%
Malta’s GDP figures for the fourth quarter have not yet been released. It is hoped that the recent unemployment rises and falling consumption will not take us near the recession zone.