Europe: Sharp Contraction in 4Q 2012

Econintersect:  The 17-nation Eurozone saw a decline in GDP of 0.6% in the fourth quarter 2013 (-2.3% annual rate).  The entire European community, including the 10 countries that do not use the Euro declined almost as much (-0.5%)  the decline was the worst since for any quarter since The Great Recession (2007-2009).  The decline from the fourth quarter of 2011 (y-o-y change) was 0.9% for the Eurozone and 0.6% for the entire EU.  After flirting with continent-wide recession for the first three quarters of 2012, Europe took the plunge in Q4 2012.

One bright note: After dropping steeply for three months in a row, Industrial Production rebounded for both the E-17 and the E-27 countries in December.  If that continues when the January numbers are reported it could indicate that the 4Q plunge may have been halted and 2013 may see smaller declines in GDP or maybe a return to positive growth.

Here is the complete press release by Eurostat:

Flash estimate for the fourth quarter of 2012

Euro area GDP down by 0.6% and EU27 down by 0.5%
-0.9% and -0.6% respectively compared with the fourth quarter of 2011

GDP fell by 0.6% in the euro area1 (EA17) and by 0.5% in the EU271 during the fourth quarter of 2012, compared with the previous quarter, according to flash estimates2 published by Eurostat, the statistical office of the European Union. In the third quarter of 2012, growth rates were -0.1% and +0.1% respectively.

Compared with the same quarter of the previous year, seasonally adjusted GDP fell by 0.9% in the euro area and by 0.6% in the EU27 in the fourth quarter of 2012, after -0.6% and -0.4% respectively in the previous quarter.

During the fourth quarter of 2012, GDP in the United States was stable compared with the previous quarter (after +0.8% in the third quarter of 2012). Compared with the same quarter of the previous year, GDP rose by 1.5% in the United States (after +2.6% in the previous quarter).

Over the whole year 20123, GDP fell by 0.5% in the euro area and by 0.3% in the EU27.

Click on table for larger image.

1. The euro area (EA17) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The EU27 includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.

2. European quarterly national accounts are compiled in accordance with the European System of Accounts 1995 (ESA95).  The flash estimate of fourth quarter 2012 GDP growth presented in this release is based on Member States’ data as available, covering 97% of EA17 GDP (90% of EU27 GDP).  For more details of the flash methodology please refer to News Release 55/2003 of 15 May 2003.

Data on previous revisions showing that the flash estimation procedure is reliable are available on the Eurostat website:
http://epp.eurostat.ec.europa.eu/portal/page/portal/national_accounts/methodology/quarterly_accounts.

With the flash estimate, euro area and EU GDP figures for earlier quarters are not revised. All figures presented in this release may be revised with the second estimate of GDP scheduled for 6 March 2013.

3. These annual growth rates are derived from today’s flash estimate for the fourth quarter and the previously released estimates for quarters one to three and include a correction for working day effects.

Issued by: Eurostat Press Office
Tim ALLEN
Tel: +352-4301-33 444
[email protected]

Eurostat news releases on the internet:
http://ec.europa.eu/eurostat

For further information on data:

Christine GERSTBERGER
Tel: +352-4301-30 175

Luis BIEDMA
Tel: +352-4301-34 728

[email protected]

Selected Principal European Economic Indicators: http://ec.europa.eu/eurostat/euroindicators

John Lounsbury