Eurozone first time recession

The Eurozone has officially slumped into recession for the first time ever after the economy shrank by 0.2 percent in the third quarter, the European Union said Friday.

• The 15 nations sharing the Euro suffered a 0.2 percent contraction in the previous quarter from April to June.
• Recession means 2 consecutive quarters of falling gross domestic product (GDP).
• Figures Thursday showed the German economy shrunk 0.5 percent in the third quarter following a 0.4 percent slump in the second quarter.
• The Spanish economy had also dropped in the third quarter for the first time since 1993.
• Experts expect a worse situation in the European countries that use the Euro. 
• “Not only did the third quarter contraction in GDP confirm that the Eurozone is now in recession, but latest data and survey evidence indicate that the fourth quarter is likely to see a sharper fall in GDP as the financial crisis bites harder,” said Howard Archer chief European economist at Global Insight.
• On a 12-month comparison, the eurozone economy grew 0.7 percent in the third quarter, down sharply from 1.7 percent in the previous quarter, Eurostat agency said.
• France hardly avoided the recession with its economy managing a 0.1 percent increase in the July-September third quarter.
• “We now have painful proof that there has been an excessive degree of complacency, which implies that the policy response in Europe is well behind the curve,” said Marco Annunziata, chief economist at the Unicredit group.
• “The picture is gloomy: Germany and Italy contracted more sharply than expected, Spain capitulated as well, France narrowly avoided recession … but its demise is only a matter of time,” he added.
• On the other hand, Eurozone marks a continuing inflation felling back in October to a nine-month low of 3.2 percent.  
• It is believed that inflation would probably continue falling in next months making very possible that the European Central Bank (ECB) may cut interest rates. Meanwhile, economic activity remains slow.