Financial News: Eurozone Economy Flirts With Recession

Eurozone Economy Flirts With Recession

(RTTNews) - Euro area is on the brink of recession as the economy of the single currency bloc failed to grow in three out of the last four quarters, latest data from the statistical office Eurostat showed Tuesday.

Confirming the previous estimate, gross domestic product shrunk 0.1 percent quarterly, reversing the 0.2 percent expansion in the second quarter.

Another quarter of contraction would push the economy into a technical recession.

Year-on-year economic growth softened to 0.1 percent from 0.5 percent a quarter ago. The rate matched the preliminary flash estimate published on October 31.

Eurostat is scheduled to release main aggregates of GDP on December 7.

Data showed that quarterly growth in employment improved to 0.3 percent in the third quarter from 0.1 percent in the preceding period.

Employment rose 1.4 percent on a yearly basis, following the second quarter's 1.3 percent increase.

However, Capital Economics economist Bradley Saunders said the strength in employment is unlikely to last.

"With business surveys deep in contractionary territory and firms' hiring intentions falling sharply, the labor market is set to loosen as the economy contracts for a second successive quarter in the fourth quarter", added Saunders.

The International Monetary Fund has forecast the euro area to grow 0.7 percent this year and 1.2 percent in 2024.

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