- Jonathan Loynes, chief European economist at Capital Economics
The Eurozone economy slipped deeper into recession in the final three months of 2012, with the worst performance in almost four years, as the region's three biggest economies suffered slumping output. Economic output in the 17-country region shrank by 0.6% in the fourth quarter, after a 0.1% contraction in the prior quarter, the European Union's statistics office Eurostat said Thursday. This is the biggest contraction since the first quarter of 2009 in the aftermath of the collapse of Lehman Brothers Holdings Inc., and well below analysts' expectations, which called for a 0.4% drop. At the same time only Estonia and Slovakia recorded growth, while Europe's largest economy shrank by 0.6% and France and Italy recorded a 0.3% and 0.3% contractions, respectively. Latest data marked the currency bloc's first full year in which no quarter produced growth.
"The outlook for 2013 remains subdued," said Peter Vanden Houte, an economist at ING Group NV in Brussels. "While a gradual improvement of the world economy is likely to support European exports, domestic demand is bound to remain very weak."
"While sentiment towards the region has improved, the hard news on the economy remains distinctly weak," said Jonathan Loynes, chief European economist at Capital Economics in London.
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