Nicholas Winning, WSJ: The euro zone plunged deeper into recession in the fourth quarter of last year with its sharpest contraction in gross domestic product since records began in 1995, data from the European Union’s Eurostat statistics agency showed Friday.
The decline was led by the biggest quarterly fall in German GDP in more than two decades. France and Italy also reported severe downturns as the global financial crisis throttled demand and output at home and in the region’s main trading partners.
Eurostat said euro-zone GDP contracted 1.5% on a quarter-to-quarter basis and fell 1.2% on an annualized basis, the biggest falls by both measures on record. In the third quarter, GDP shrank 0.2% on a quarterly basis, but grew 0.6% on a year-to-year basis.
The fourth-quarter figures were even weaker than the market consensus estimate of a 1.3% quarterly drop and 1.2% decline on an annualized basis from a Dow Jones Newswires survey of economists last week.
The data are likely to support expectations that the European Central Bank will cut its benchmark interest rate again in March. The ECB has lowered rates to 2.0% from 4.25% in October as weaker energy prices fuelled a sharp slowdown in inflation in the region.