Recession returns to eurozone

Economic activity in the single-currency area dropped 0.1 percent between July and September, following a decline by 0.2 percent in the second quarter of 2012, the EU statistics office, Eurostat, announced Thursday.

This means that the 17-nation eurozone has fallen into a recession, which is officially described as two successive quarters of economic contraction. Moreover, the eurozone has been hit by a so-called double-dip recession as the current decline is the second since the global financial crisis in 2009.

Eurostat data showed that, apart from Germany and France, no other member state was able to garner economic growth in the third quarter. However, expansion rates of 0.2 percent in Europe's two largest economies weren't big enough to offset steep declines in the zone's debt-stricken southern periphery.

The European Commission itself forecast a contraction of 0.4 percent for the area this year, and meager growth of just 0.1 percent for 2013, making a quick rebound seem elusive.

Positive developments were reported by Eurostat with regard to inflation, which in October slowed to 2.5 percent on an annual basis from 2.6 percent in September.

uhe/kms (Reuters, dpa, AFP)