EU economy shrank more than expected in fourth quarter

February 13th, 2009 - 9:46 pm ICT by IANS  

Brussels, Feb 13 (DPA) The economies of the European Union (EU) and the eurozone both posted worse-than-expected quarterly drops of 1.5 percent in the final three months of 2008, the EU’s statistics office, Eurostat, said Friday.
According to Eurostat’s preliminary estimate, fourth quarter gross domestic product (GDP) also shrank year-on-year by a seasonally-adjusted 1.2 percent in the 15-member eurozone and by 1.1 percent in the 27-member EU.

Apart from tiny Lithuania, the worst-performing EU economy in the fourth quarter was Germany, which saw a quarterly GDP drop of 2.1 percent.

The quarterly fall in Europe’s locomotive was the third in a row and the largest since German unification in 1990.

The steep declines across Europe, which followed solid performances during the first half of 2008, give a yearly GDP growth rate of 0.9 percent for the EU and 0.7 percent for the euro area.

Both figures are worst than recently forecast by the European Commission.

On Jan 19, the EU’s executive had predicted fourth quarter contractions of 1.3 percent for the EU and 1.5 percent for the euro area, giving overall decline in GDP rates for 2008 of 1.0 and 0.9 percent respectively.

European Commission officials said Friday’s figures were “no surprise” and stuck to their Jan 19 forecasts, which predict a return to modest growth in 2010 after an EU-wide GDP drop of 1.8 percent in 2009.

The 16th member of the eurozone, Slovakia, adopted the single currency Jan 1, 2009.

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