Euro zone officially sinks into recession

Friday 14 November 2008 12.49
Recession - Euro zone figures confirm slump
Recession - Euro zone figures confirm slump

The euro zone economy has slumped into recession for the first time ever, EU data released today reveals, with GDP falling 0.2% in the second and third quarters.

The 27-nation EU as a whole avoided the same fate only by recording zero, rather than negative, growth in the second quarter.

On a 12-month comparison, the euro zone economy grew 0.7% in the third quarter, down sharply from 1.7% in the previous quarter, the official Eurostat agency said.

The announcement in Brussels confirmed widely held fears that the euro zone had fallen into recession for the first time since its formation in 1999.

Germany, Europe's largest economy, is the deepest in the recession mire, according to the figures, with its economy contracting by 0.2% in the third quarter of 2008 after falling 0.4% in the previous three months. Italy joined Germany in the recession club today.

Two consecutive quarters of falling gross domestic product is the formal definition of recession.

France, the euro zone's second-largest economy, narrowly avoided the 'R' word, with its economy scraping out a 0.1% increase in the July-Spetember third quarter.