Thursday, August 14, 2008

Eurozone contracts

The eurozone economy has contracted for the first time since the launch of the euro a decade ago, with France hit unexpectedly-badly by high oil prices and deteriorating global conditions.

Gross domestic product in the 15-country region fell by 0.2 per cent in the second quarter, reported Eurostat, the European Union’s statistical office. That marked a sharp turnaround from the first three months of the year, when GDP expanded by 0.7 per cent....

Fears of a technical recession – two consecutive quarters of negative growth – are widespread across the eurozone. Jean-Claude Trichet, president of the European Central Bank, warned earlier this month that the second and third quarters would be “particularly weak”.

Confirmation the eurozone growth has gone into reverse comes a day after Japan, the world’s second largest economy, revealed its worst quarterly performance for seven years and the Bank of England presented a gloomy outlook for the UK economy.

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