The recession in the euro area deepened more than expected in 4Q12, with GDP contracting by 0.6% q/q, making it the worst GDP print since 1Q09. Still, the recent business surveys suggest the eurozone economy is showing signs of a recovery and that the economic cycle will likely bottom out in the course of 2013. The pace of quarterly GDP in the euro area is likely to accelerate through the year, returning to growth by mid-2013. Data released today also showed Germany and France shrank more than expected in 4Q12. German GDP fell by 0.6% q/q and French declined by 0.3% q/q, after quarter-on-quarter growth recorded in both countries in 3Q12. Looking ahead, economic activity in Germany is expected to return to growth as early as 1Q13. Economic rebound ahead in case of Germany is signalled by a string of upbeat sentiment surveys (Ifo, PMIs, Gfk), which show an improving business climate and stronger consumer confidence. In case of France, the worst is not yet behind us. Taking into account the recent deterioration of forward-looking indicators, the French economy - unlike Germany - is likely to enter recession in 1Q13.
Eurozone, GDP (4Q12): -0.6% q/q
Previous (3Q12): -0.1%
Consensus: -0.4%
Eurozone, GDP (4Q12): -0.9% y/y
Previous (3Q12): -0.6%
Consensus: -0.7%
Germany, GDP (4Q12): -0.6% q/q
Previous (3Q12): +0.2%
Consensus: -0.5%
France, GDP (4Q12): -0.3% q/q
Previous (3Q12): +0.1%
Consensus: -0.2%