topics
tools
Expatica countries
Index Last Var.(%)
BEL 20 2119.44 0.28
DAX 6339.94 0.38
IBEX 30 6543 0.13
CAC 40 3047.94 0.32
FTSE 100 5351.53 0.03
AEX 292.76 0.23
DJIA 12454.83 -0.60
Nasdaq 2837.53 -0.07
FTSE MIB 13154.8 0.36
TSX Composite 11576.47 0.09
ASX 4081.2 -0.61
Hang seng 18713.41 0.25
Straits Times 2772.75 -0.24
ISEQ 20 500.94 1.55
You are here: Home News European News Recession storms across Europe

European News

archive
Enlarge font Decrease font Text size


15/05/2009Recession storms across Europe

France became the latest European countries to enter recession while Spain’s and Germany’s economies slump further.

Paris – France led a string of European countries entering recession on Friday as Germany, the continent's economic powerhouse, registered its worst performance on record in the first quarter.

As Asia's biggest economy, Japan, faced signs of mounting deflationary pressures, the gloomy data from Europe cast a pall over recent claims that the first green shoots of recovery had been sighted.

However Europe's leading stock markets rose at the open, with analysts saying the rises reflected an expectation that the crisis was bottoming out.

France became the last of the major European Union countries to dip into recession when figures from the official statistics agency INSEE, showed French gross domestic product shrank 1.2 percent in the first quarter of 2009 after falling by 1.5 percent in the final quarter of last year.

A recession is usually defined as two quarters of negative growth.

INSEE also updated its figure for French growth in 2008, reporting that the economy had grown by only 0.3 percent in 2008 rather than the 0.7 percent it had earlier offered as an estimate.

The French government expects the economy to shrink by around three percent this year, as the world financial crisis stifles credit and saps demand.

Meanwhile, France's neighbour and main trading partner Germany said its recession deepened in the first quarter, when the economy shrank by 3.8 percent, its strongest contraction since quarterly records began in 1970.

Germany, Europe's biggest economy and which accounts for a third of eurozone output, contracted by 3.8 percent in the first three months of the year compared to the final quarter of 2008, the statistics office said.

Official figures made equally depressing reading from other parts of central Europe, including Austria which slid into recession after its economy contracted by 2.8 percent in the first three months of the current year.

Romania also joined the recession club when its economy shrank by 2.6 percent in the first quarter while the economies of Italy, Slovakia and Hungary all recorded negative growth figures.

Despite the grim growth figures, Europe's main stock markets rose as investors looked forward to a prospective recovery, dealers said.

London's FTSE 100 index of top shares gained 0.75 percent to stand at 4,395.11 points in early trade while in Paris the CAC 40 was up 0.72 percent and Frankfurt's DAX 30 advanced 0.40 percent.

"This time around, the worst really seems to be over," said Carsten Brzeski, an analyst at ING bank, citing other more positive forward-looking economic indicators for the German economy despite its first-quarter contraction.

"Looking ahead, the second quarter has the potential to surprise to the upside," boosting stock markets, he said.

Japanese share prices closed up 1.88 percent, mirroring gains on Wall Street as investors eyed prospects for an economic recovery.

The rises came despite mounting concerns that the world's number two economy may be facing a repetition of its 1990s deflationary spiral when falling prices led to weak consumer spending.

Central bank figures showed wholesale prices fell 3.8 percent in April from a year earlier, the steepest drop in 22 years.

Consumer price inflation turned negative in March for the first time in 18 months and the fear is that Japan may see a repeat of its 1990s deflationary spiral when falling prices led to weak consumer spending.

However Finance Minister Kaoru Yosano said there were signs the recession was abating with Japan's core machinery orders falling 1.3 percent in March from the previous month, less than expected.

"I welcome some signs of easing in the economic slowdown. But we need to remain alert about overall economic conditions," he told reporters.

US Treasury Secretary Timothy Geithner said earlier this week the financial system "is starting to heal" as a response to government efforts to get more credit flowing, including moves to clean up so-called "toxic assets" that are weighing on banks' ability to lend.

AFP / Expatica


0 reactions to this article

Be the first person to add a comment

General rating: Not rated yet

Rate article:    Add my rating



0 reactions to this article

Be the first person to add a comment
Discussion Forums

Finding your way in Switzerland

Trekking and Backpacking

Community Noticeboard Switzerland

Let's coach..Saturday.Free.In English.

Finding your way in Switzerland

Chinese Nanny (Ayi) wanted

Finding your way in Switzerland

Need Househelp who prepares Thai food

Student forum Switzerland

@SAP Business Objects Online Training in Netherlands by SAP BOSS

participate in the forums

Inside Expatica
Residence and work permits in Switzerland

Residence and work permits in Switzerland

How to apply for a residency or work permit in Switzerland for you and your family.

How to rent and buy a house in Switzerland

How to rent and buy a house in Switzerland

Information about renting property and obtaining a mortgage in Switzerland.

Switzerland's healthcare system

Switzerland's healthcare system

Information about the Swiss healthcare system, health insurance, pharmacies and emergency numbers.

Banking in Switzerland

Banking in Switzerland

Explaining Swiss currency, banknotes, credit cards and bureaux de change.