The euro zone economy saw its deepest contraction on record in the fourth quarter of 2008, data showed on Friday, boosting pressure on the European Central Bank to cut interest rates by 50 basis points in three weeks.
Gross domestic product in the 15 countries using the euro in the last three months of 2008 shrank 1.5 percent against the previous quarter for a 1.2 percent fall year-on-year, the European Union statistics office Eurostat said on Friday.
“Now it’s official: the euro zone economy is in its deepest recession since the end of the Second World War,” said Christoph Weil, economist at Commerzbank.
“The collapse of exports and a sharp fall in investments were most probably the main reasons for the slump,” he said.
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Economists polled by Reuters had expected a 1.3 percent quarterly drop after 0.2 percent contractions in the second and third quarters, and a 1.1 percent year-on-year decline.
- A d v e r t i s e m e n t
“This Friday the 13th is living up to its name. Eurostat has just released ‘scary’ GDP numbers,” said Martin van Vliet, economist at ING.