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Europe Economy Falls Into First Recession in 15 Years

Posted By admin On November 14, 2008 @ 5:09 am In Money Watch | Comments Disabled

Fergal O’Brien and Simon Kennedy
Bloomberg [1]
Friday, Nov 14, 2008

Europe’s economy fell into its first recession in 15 years in the third quarter, paving the way for deeper cuts to interest rates and taxes amid the worst financial crisis since the Great Depression.

Gross domestic product in the 15 euro nations shrank 0.2 percent from the previous three months, when it also contracted 0.2 percent, the European Union’s Luxembourg-based statistics office said today. The two quarters of contraction — the result of this year’s surges in the cost of credit, the euro and oil prices — mark the first recession since the single currency was introduced almost a decade ago.

Consumers and companies are feeling the pain as sales, profits and hiring deteriorate, forcing the European Central Bank to embark on the fastest round of rate cuts in its history and governments to line up fiscal-stimulus programs. With the U.S. and Asian economies also struggling, leaders from the world’s largest nations meet in Washington today to discuss ways of limiting the impact of the slump.

“The situation is likely to get worse before it gets better,” said Nick Kounis, an economist at Fortis in Amsterdam. “There will be no real recovery before 2010.”

(Article continues below)

Europe Economy Falls Into First Recession in 15 Years 161008pptv3 [2]

From a year earlier, the euro-area economy expanded 0.7 percent in the third quarter. Both the quarterly and annual rates were in line with the median estimates of economists surveyed by Bloomberg News.

October Inflation

Separate figures today showed that inflation in October eased to 3.2 percent from 3.6 percent in September, matching an initial estimate on Oct. 31. Energy-price inflation cooled from 13.5 percent to 9.6 percent, the lowest since December.

Full article here [1]

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[1] Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=aycN4Fh5lv6Y&refer=home

[2] Image: http://www.prisonplanet.tv/subscribe.html

[3] Oil Falls Most in 3 Years as Slowing Economy Threatens Demand: http://www.prisonplanet.com/oil-falls-most-in-3-years-as-slowing-economy-threatens-demand.html

[4] Euro zone falls into second recession since 2009: http://www.prisonplanet.com/euro-zone-falls-into-second-recession-since-2009.html

[5] U.S. Economy May Shrink 1.5% in 2009 as Recession Stymies Fed: http://www.prisonplanet.com/us-economy-may-shrink-15-in-2009-as-recession-stymies-fed.html

[6] Dollar Falls as Bush Talks of Recession, Traders Bet on Fed Cut: http://www.prisonplanet.com/dollar-falls-as-bush-talks-of-recession-traders-bet-on-fed-cut.html

[7] Dollar Falls to Near 2009 Low as Economy Pares Refuge Demand: http://www.prisonplanet.com/dollar-falls-to-near-2009-low-as-economy-pares-refuge-demand.html

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