German Economy Edges Back into Growth as France Contracts
Germany’s economy, the largest in Europe, edged back into growth in the first quarter of 2013 after a sharp downturn at the end of last year, while France slipped into recession according to data.
Germany saw minimal growth of 0.1% in Q113, weaker than the expected 0.3%, as a severe winter prevented a stronger rebound. “The German economy is only slowly picking up steam,” the Federal Statistical Office (Destatis) said. “The extreme winter weather played a role in this weak growth.” It also revised down its figure for Q412 to show a contraction of 0.7%, from the previous estimate of 0.6%.
France’s economy is technically in recession as a 0.2% contraction in Q412 was followed by a similar figure for Q113, according to Insee, the French national statistics agency. The figure was released on the first anniversary of Francois Hollande being elected as French president.
Separately, Eurostat reported that economic activity across the Eurozone contracted by a further 0.2% in Q113, the sixth consecutive quarterly fall although less steep than the 0.6% drop recorded in Q412.
Earlier this month the European Central Bank (ECB) cut eurozone interest rates to a record low of 0.5% in an attempt to stimulate growth.
Meanwhile, the Bank of England’s (BoE) outgoing governor, Sir Mervyn King, said that the outlook for the UK economy had improved with the growth rate of 0.3% recorded in Q113 likely to pick up to 0.5% in the second quarter. The BoE, which will be headed by Mark Carney, currently governor of the Bank of Canada, from 1 July, said that “a modest and sustained recovery” was now likely for the UK over the next three years.