In the second quarter of 2013, the eurozone’s gross domestic product rose 0.3 percent compared with the previous quarter, which was better than expected, according to analysis by Howard Archer, IHS Global Insight’s chief European and U.K. economist.
The region had previously suffered a record six consecutive quarters of contraction between the fourth quarter of 2011 and the first quarter of 2013, with the rate of decline peaking at -0.6 percent quarter-over-quarter in the fourth quarter of 2012, before moderating to -0.3 percent in the first quarter of 2013.
Growth of 0.7 percent in Germany in the second quarter, versus the previous quarter, was a “key factor” leading the eurozone out of recession, while France exited with a “surprisingly decent” expansion of 0.5 percent, Archer said in a written statement. He also noted that it was encouraging to see Portugal exit recession after 10 successive quarters of contraction. Additionally, a rebound in construction activity appeared to help to the eurozone’s economic performance, according to the analysis.
However, the region still faces a “tough job” developing economic recovery, as restrictive fiscal policies, ongoing tight credit conditions, high unemployment and muted consumer purchasing power will continue, Archer said. As a result, he predicted the eurozone’s GDP will contract by 0.5 percent in the full year of 2013, but that it will increase by 0.7 percent in 2014.