Eurozone recession deepens with record GDP drop

The economy of the nations sharing the euro slumped further in the final quarter of 2008, contracting by a record 1,5% while the European Union as a whole joined it in recession, EU data showed on Friday.

For the eurozone’s 15 nations last year it was the third straight quarterly contraction, according to flash estimates published by Eurostat, the Statistical Office of the European Communities.

The contraction was even worse than the 1,3% fall predicted by analysts polled by Dow Jones newswires as the credit crunch and global economic downturn showed its teeth.

For the wider EU of 27 nations the similar 1,5% drop in gross domestic product (GDP) saw it fall into recession, defined as two consecutive quarters of economic contraction.

It has narrowly avoided formal recession previously thanks to 0,0% growth in the second quarter of 2008.

The speed and depth of the recession was illustrated by the drop from 0,2% GDP contraction in the third quarter to 1,5% in the fourth.

For 2008 as a whole, including the period before the world learnt the truth about sub-prime mortgages and toxic bank assets, GDP grew by 0,7% in the euro area and by 0,9% in the 27-nation EU.

The shrinking EU economy was amply illustrated in figures issued earlier on Friday showing the European new cars sales slumped in January to the lowest level for 20 years.

Sales fell by 27% in January from the figure in January last year, the European Automobile Manufacturers Association said. — AFP

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories


Already a subscriber? Sign in here


Latest stories

‘It takes two to tango’: The private sector must ’fess...

During a webinar on Wednesday, the group chief executive of EOH, Stephen van Coller, called private sector participation in the Zondo commission into state capture ‘disappointing’

Maasai land in Tanzania earmarked for UAE royals

Protracted effort by authorities to evict the pastoralists in Loliondo for safari tourism has led to violent confrontation

A stylish way to pay

Steve Jobs said, “The best way to create value in the 21st century is to connect creativity with technology”. A fact leading African tech...

South Africa among countries where debt collection is most difficult

Some small to medium businesses are taking as long as 180 days to settle debts, according to an assessment by international insurer Allianz Trade

press releases

Loading latest Press Releases…