Monday, Nov 3, 2008
The 15 countries using the euro have slumped into a shallow recession in the face of the worst financial crisis in generations, the European Commission estimates.
After growing 0.7% in the first quarter, the eurozone economy shrank 0.2% in the second quarter.
It is set to contract by 0.1% in both the third and fourth quarters, according to the commission’s forecasts.
This would confirm the zone to be in recession, which is technically defined as two consecutive quarters in which the economy contracts.
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It is the first recession the zone has seen since its creation in 1999.
As the commission downgraded its forecasts across the board, it estimated that the economy would register 1.2% growth for the whole of 2008 before slowing almost to stagnation throughout 2009.
The European Commission also forecast a short, shallow recession for the whole EU.
It predicted the combined economy of the bloc would shrink by 0.1% in both the third and fourth quarters of 2008.
For the whole of 2008, the EU’s executive arm forecast that the 27-nation economy would grow 1.4% and eke out growth of 0.2% in 2009.
This article was posted: Monday, November 3, 2008 at 5:20 am