Published On: Wed, Aug 14th, 2013

Eurozone officially exits recession

The eurozone has overcome its longest recession to date, growing modestly in the second quarter of this year. The recovery, however, remains fragile as the upswing is carried by only a few of its members.

The 17 nations sharing the euro single currency saw their combined economic output grow by 0.3 percent between April and June, according to latest data released by the European Union’s Statistics Office , Eurostat, on Wednesday.

The rise in gross domestic product (GDP) from the previous three-month period was the first since the final quarter of 2011, and means that the currency area has officially ended the longest recession in its 14-year history.

The rebound in growth, however, was rather fragmented with the eurozone’s economic heavyweights Germany and France as the prime engines of expansion, Eurostat figures showed.

The German economy further picked up steam, rising by 0.7 percent from nearly stalling in the first quarter at 0.1 percent. France, too, showed a robust gain of 0.5 percent. However, leading the way in terms of growth was Portugal which grew out of months of contraction at a rate of 1.1 percent in the quarter.

Noting that the eurozone was on the road to recovery, EU Economic Affairs’ Commissioner Olli Rehn, however, warned against complacency.

“There is still a long way to go before we reach our ultimate goal of a sustainable growth model that delivers more jobs,” he said.

Rehn also said that the rebound was still fragile and could only be maintained if governments were sticking to reforms anchored in the tough austerity policies of the past few years.

And indeed, debt-laden eurozone members such as Spain, Italy and Greece continued struggling in the second quarter, although the pace of their economic contraction slowed.

GDP in Spain was down 0.1 percent, while Italy’s economy shrank 0.2 percent. Greece doesn’t publish quarterly figures, but Eurostat data showed that the country’s year-on-year contraction eased to 4.6 percent from 5.6 percent in the first quarter.

For the whole eurozone, year-on-year growth figures also compare favorably in the second quarter, showing just 0.7 percent less economic output, which is an improvement on the 1.1 percent annual contraction recorded at the beginning of the year.

uhe/hc (Reuters, AP, dpa, AFP)

Via: DE.DE

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