The 15-member eurozone officially slumped into recession after figures released yesterday showed its economy contracting by 0.2 percent for a second quarter in a row.
The eurozone’s latest GDP estimates were published just one day before heads of state and government from the world’s 20 leading economies were due to meet in Washington to discuss the global financial crisis, which experts say is partly to blame for Europe’s economic slowdown.
According to flash estimates from the European statistical office, Eurostat, GDP in two of the euro area’s biggest economies, Germany and Italy, fell by 0.5 percent in the third quarter of this year, after falling by 0.4 percent in the second.
Meanwhile, another eurozone heavyweight, France, saw its GDP grow by just 0.1 percent in the third quarter, after contracting by 0.3 percent in the previous three months.
The Eurostat figures confirmed that Europe’s economic locomotive, Germany, had entered into recession for the first time in five years on the back of falling exports.
GDP in the eurozone’s fourth-largest economy, Spain, contracted for the first time in 15 years in the third quarter, by 0.2 percent.
Analysts attributed the slowdown mainly to the collapse of the country’s important construction sector.
While EU GDP also fell by 0.2 percent in the third quarter, economic growth in the 27-member bloc was stuck at zero per cent in the second quarter.
Economists’ technical definition of a recession is two consecutive quarters of negative economic growth.
Meanwhile, Hong Kong fell into a recession yesterday as government figures showed a second quarter of contracted growth with the economy growing just 1.7 percent in the year’s third quarter.
The rate of GDP growth in the city of 6.9 million fell from 4.2 percent in the second quarter to 1.7 percent in the third, according to official figures.
The Hong Kong government responded by revising downwards its growth forecasts for the year from between 4 percent and 5 percent to between 3 percent and 3.5 percent.
This means it is anticipating a possible contraction in the fourth quarter.
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