THE EURO-ZONE economic recovery stalled at the end of last year, according to revised official figures showing the 16-country region performed worse than previously reported.
Gross domestic product (GDP) was unchanged in the fourth quarter compared with the previous three months, said Eurostat, the European Union’s statistical office. Previously, it had reported a 0.1 per cent increase.
The latest revision highlighted the lacklustre rebound experienced by continental Europe, with domestic demand hit by the phasing out of government emergency support measures.
In contrast, the US economy proved far more dynamic in the three final months of 2009, when the country saw a 1.4 per cent rise in GDP. The UK escaped from recession later than the euro zone, but also notched up a better performance in the fourth quarter, reporting an 0.4 per cent rise in GDP.
Preliminary figures for the Republic have shown a 2.3 per cent contraction in the final three months of last year.
Concerns about the euro zone have focused recently on the weakness of its southern European members – especially Greece, which has been hit by a crisis over its public finances. But the latest economic indicators suggest that the first quarter of 2010 saw robust growth, with euro-zone manufacturers helped by the pick-up in the global economy and the fall in the euro that has been caused by the Greek crisis.
Revised purchasing managers’ indices for March showed private sector economic activity expanding at the fastest rate since August 2007. The “composite” index, covering manufacturing and services, rose from 53.7 in February to 55.9 – indicating the eight consecutive month of growth.
The latest readings were consistent with GDP rising by between 0.4 per cent and 0.5 per cent in the first quarter, according to Markit, which produces the survey.
The weak final quarter of 2009 appeared “more a temporary blip than a reversal of fortunes”, said Chris Williamson, chief economist at Markit.
He added: “There are also signs that growth is becoming better balanced, which should help build a basis for a more sustainable recovery. Although still led by manufacturing, especially in Germany, services growth picked up to the strongest since late 2007.”
The strong purchasing managers’ indices will ease worries that the bitter winter had put the recovery on hold. – (Copyright The Financial Times Limited 2010)
