Euro zone may exit from recession yet give little to cheer about

Tue Aug 13, 2013 6:05pm EDT
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By Martin Santa

BRUSSELS (Reuters) - The euro zone economy may learn later on Wednesday that it has moved out of its longest recession, needing seven quarters to dig up modest growth in the three months to June.

Data is expected to show growth in the quarter - but just 0.2 percent, according to economists polled by Reuters. In the first quarter it shrank by that amount.

The overall picture is expected to be mixed. Peripheral countries, such as Spain, Greece and Portugal are struggling with high double-digit unemployment, on-and-off political rows and painful austerity.

By contrast, the bloc's largest economy, Germany, is expected to have gathered speed.

France, the bloc's second-largest economy, and Germany release second-quarter data early. They will be followed by overall euro zone figures at 0900 GMT.

The Reuters poll, published on Tuesday, suggested that despite the quarter's likely growth the bloc is not likely to start growing again at a healthy rate before 2015. Growth was seen unlikely to exceed 0.4 percent in any quarter from now until 2015.

There have been signs of improvement.

Euro zone industrial production rose in April and June, construction output picked up after a weak first quarter hit by bad weather and joblessness fell for the first time in more than two years in June.   Continued...

A man talks on his cell phone outside a Movistar store as people walk past in Madrid February 28, 2013. REUTERS/Susana Vera