From the Ft Online
Economic confidence across the 16-country eurozone has collapsed to levels not seen in Europe for at least 24 years, as unemployment soars and German exporters reel from tumbling global demand.
The latest eurozone economic data, covering the end of 2008, indicated that the recession that began in the first half of last year is still gathering intensity.
The European Commission on Thursday reported its economic sentiment indicator plummeted in December to the lowest level since its survey began in 1985, with steep falls reported across all economic sectors.
“That is quite dramatic and suggests a significant worsening of what is going on,” said Robert Barrie, European economist at Credit Suisse.
Eurozone gross domestic product probably contracted by 1 per cent in the final quarter of last year, Mr Barrie estimated, with a similar fall likely in the first three months of this year.
Such declines would be the sharpest on record since the euro was launched in 1999 and dwarf the contractions of 0.2 per cent seen in the second and third quarters of last year.
“The economy is in meltdown,” added Ken Wattret at BNP Paribas.
Eurozone unemployment, meanwhile, continues to mount, jumping by 202,000 in November – only slightly less than the record 220,000 rise seen in October, according to Eurostat, the European Union’s statistical office.
Lengthening jobless queues in turn have undermined consumer sentiment. Eurozone households, with the exception of those in Spain and Ireland, have not been hit by the effects of falling house prices.
But the region overall has been buffeted badly by the dramatic turn for the worse experienced by industry in Germany, Europe’s largest economy. German exports slumped by a record 10.6 per cent in November alone, according to the country’s statistical office – a dramatic worsening after a fall of just 0.6 per cent in October.
“We knew that external demand had dropped dramatically – and that is now reflected in the hard data,” said Dirk Schumacher, economist at Goldman Sachs in Frankfurt.
Economic confidence across the 16-country eurozone has collapsed to levels not seen in Europe for at least 24 years, as unemployment soars and German exporters reel from tumbling global demand.
The latest eurozone economic data, covering the end of 2008, indicated that the recession that began in the first half of last year is still gathering intensity.
The European Commission on Thursday reported its economic sentiment indicator plummeted in December to the lowest level since its survey began in 1985, with steep falls reported across all economic sectors.
“That is quite dramatic and suggests a significant worsening of what is going on,” said Robert Barrie, European economist at Credit Suisse.
Eurozone gross domestic product probably contracted by 1 per cent in the final quarter of last year, Mr Barrie estimated, with a similar fall likely in the first three months of this year.
Such declines would be the sharpest on record since the euro was launched in 1999 and dwarf the contractions of 0.2 per cent seen in the second and third quarters of last year.
“The economy is in meltdown,” added Ken Wattret at BNP Paribas.
Eurozone unemployment, meanwhile, continues to mount, jumping by 202,000 in November – only slightly less than the record 220,000 rise seen in October, according to Eurostat, the European Union’s statistical office.
Lengthening jobless queues in turn have undermined consumer sentiment. Eurozone households, with the exception of those in Spain and Ireland, have not been hit by the effects of falling house prices.
But the region overall has been buffeted badly by the dramatic turn for the worse experienced by industry in Germany, Europe’s largest economy. German exports slumped by a record 10.6 per cent in November alone, according to the country’s statistical office – a dramatic worsening after a fall of just 0.6 per cent in October.
“We knew that external demand had dropped dramatically – and that is now reflected in the hard data,” said Dirk Schumacher, economist at Goldman Sachs in Frankfurt.
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