Eurostat confirms eurozone has avoided recession

6 June 2012 | By Henry Brennan

The statistics agency of the European Union reported its second estimate for first quarter GDP growth in the eurozone, which remains unchanged at 0%. The estimate for the wider EU27 bloc also remains unchanged at 0.1%

Howard Archer, chief UK and European economist for IHS Global Insight, says while the eurozone has again avoided a technical recession, it is demonstrating recessionary tendencies.

“Eurostat confirmed that the Eurozone escaped technically moving into recession by the skin of its teeth as GDP was flat quarter-on-quarter in the first quarter of 2012 after contracting 0.3% quarter-on-quarter in the fourth quarter of 2011,” he says.

“However, this does not mask the fact that the Eurozone is exhibiting recessionary tendencies in most respects, Indeed, Eurozone GDP was down 0.1% year-on-year in the first quarter (revised down from flat).”

Archer says the euro area could potentially return to growth by next year, predicting 0.7% GDP growth in 2013. However, any such forecast is dependent on “significant easing of the concerns and uncertainties surrounding Greece and Spain”.

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