Eurozone misery as recession drags on

GERMANY’S economy crept back into growth in the opening months of the year but not by enough to stop the eurozone from contracting for a sixth straight quarter.

Falling output across the region meant the 17-nation bloc is in its longest recession since records began in 1995.

It shrank by 0.2 per cent between January and March, according to official statistics yesterday – worse than feared.

Tim Ohlenburg, senior economist at Centre for Economics and Business Research, said: “The eurozone continues to struggle as the public and private sectors deleverage and structural reform continues slowly.

“For next year we expect the eurozone’s GDP to remain roughly stable and further ahead slow growth still looms while internal devaluation hampers the economy in the periphery.”

Germany, which accounts for almost a third of the eurozone’s output, grew by a weaker-than-expected 0.1 per cent in the quarter. France succumbed to recession with a 0.2 per cent decline, matching the drop seen in the final quarter of 2012.

As well as France, there were first-quarter falls in Cyprus, Finland, Greece, Italy, the Netherlands and Portugal. Data last month showed Spain’s economy contracted for a seventh consecutive quarter.

Italy, the eurozone’s third largest economy, reported its seventh consecutive quarter of decline, the longest since records began in 1970.

The anaemic figures keep alive chances of more monetary easing by the European Central Bank.