Belfast Telegraph

Hopes grow for eurozone as Germany avoids recession

By Graeme Evans

Germany has avoided a return to recession after figures showed Europe's biggest economy grew by 0.1% in the third quarter of the year.

Exports and stronger household spending helped the powerhouse economy to return to growth after a 0.1% decline in output in the previous quarter. A recession is defined by two successive quarters of contraction.

The relief was matched in France where figures showed better-than-expected growth of 0.3% in the third quarter.

In contrast to the problems of the 18-nation eurozone bloc, the UK recently notched up its seventh successive quarter of growth with GDP lifting by an estimated 0.7% in the third quarter.

The European Central Bank has slashed interest rates to record lows as policymakers try to stave off the threat of a damaging deflation spiral in the stagnant economic zone.

But fears over the impact of the crisis in Ukraine has held back investment and postponed some spending.

Earlier this week, Bank of England governor Mark Carney sounded a grim warning about the threat from the moribund eurozone economy.

He said: "A spectre is haunting Europe - the spectre of economic stagnation, with growth disappointing again and confidence falling back."

However, the figures from Germany and France will fuel hopes that the region may be over the worst of the crisis.

Across the 18-nation eurozone bloc, growth was 0.2% compared with the previous quarter, equivalent to an annual rate of around 0.8%.

The quarterly performance was better than the rate of 0.1% seen in the previous quarter and the rate forecast by analysts beforehand.

Inflation was just 0.4% in the year to October, a long way below the European Central Bank's target of 2%.

Belfast Telegraph