France and Germany exit recession

13 August 2009

The French and German economies both grew by 0.3% between April and June, bringing to an end year-long recessions in two of Europe's largest economies.
"The data is very surprising. After four negative quarters France is coming out of the red," said French Finance and Economy Minister Christine Lagarde.
Few analysts expected the economies to come out of recession this early.
But economic activity in the eurozone fell by 0.1%, showing the region as a whole is still in recession.
The contraction was a marked improvement on the 2.5% drop recorded in the first three months of the year, and was smaller than economists had expected.
It was the fifth consecutive quarter of eurozone economic contraction.
Both the French and German economies last grew in the first quarter of 2008.
'State umbrella'
Exports in Germany - the continent's largest exporter - grew by 7% in June, the fastest pace in nearly three years.
Mark Sanders, Europe business reporter, Brussels
To draw a medical analogy, we've got the patient waking from a coma and talking to medical staff - they're not necesarily going to be running any marathons soon.
We are recovering from a very low base, and there are questions about how how strong and credible this economic recovery is.
The recession may be over for some, but it won't feel like its over for many people, especially those out of a job.
Unemployment in Europe is likely to continue to climb this year, the banking system is still fragile and, eventually, governments will have to stop the huge amounts of stimulus spending they are pumping into their economies.
The country's Federal Statistics Office said that household and government expenditure had also boosted growth.
It added that imports had declined "far more sharply than exports, which had a positive effect on GDP growth".
Analyst reaction to Germany's recovery was mixed.
"The recession has ended, and it has ended sooner than we all thought. We expect to see growth of 1% in the third quarter, which is very strong for Germany, and I wouldn't rule out the chance of even better growth," said Andreas Rees at Unicredit.
source: bbc.com

Posted by News Point at 4:23 AM  
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