Germany heads Eurozone recession
Feb 16th, 2009 by Jamie Bradley
The UK may be suffering from a dose of economic slowdown but for other European countries, their quarterly prescription of domestic GDP is certainly declining at a much more dramatic rate.
In the months of October, November and December the UK’s economy shrunk by 1.5% compared to the previous quarter.
Essentially, the summative valuation of goods and services across the country has fallen by 1.5%, indicating that outlets are struggling to offload their products to consumers who are reluctant to invest their hard earned funds into them. Thus, retailers resort to dropping prices and reducing their value in order to encourage more sales.
However, Germany has announced a 2.1% economical downturn in the final quarter of 2008, with Portugal and Italy registering drops of 2% and 1.8% respectively.
The cause for such figures has been put down to a downfall of foreign demand for exports as global recession has taken hold. With Germany’s dependence on this form of trading still prominent, their economy is suffering the consequences more than any other European nation.
This leaves the UK the fourth most affected by the recession of the 16 countries in the Eurozone, with France, Holland and Austria also recording significant decline. Countries registered in this group all use the Euro as either their primary or secondary source of payment.
The average economic shrink registered by those in the Eurozone reflected that of Britain’s problematic contractions, also standing at a 1.5% downfall.
New boys to the group, Slovakia, helped to ensure that the average economic shrink did not fall further to 1.74%, due to their impressive growth of 2.1%, especially in such an adverse economic climate.
These latest statics will put pressure on The European Central Bank to lower its interest rates to help ease European recession. The bank has left its interest rates unchanged since October last year, despite the Bank of England recently reducing its rates to an all time low 1% to help kick start the British economy.
By Jamie Bradley
