Europe climbed out of recession in the third quarter, data released today showed, as a recovery from its steepest downturn in a generation slowly took shape, according to dpa. The 16-member eurozone chalked up a 0.4-per-cent growth rate in the three months to the end of the September, the European Union"s (EU) statistics office said after the currency bloc narrowly missed out on emerging from recession during the second quarter. The broader-based 27-member EU grew by a more meagre 0.2 per cent in the latest quarter after contracting by 0.3 per cent in the second quarter. The rebound in the eurozone brought to an end five quarters of contraction in the region"s economy with exports and a series of anti-crisis stimulus packages helping Europe to exit recession. Compared with the third quarter in 2008, the eurozone economy slumped by 4.1 per cent and by 4.3 per cent in the 27-member EU. Nevertheless, Friday"s European figures add to signs that global growth is gaining ground. Two of the world"s other leading economies, Japan and the US have already returned to a recovery path. "The eurozone"s worst post-war recession may be officially over, but unfortunately for many people and businesses it will continue to feel like a recession for some time to come," said ING Bank economist Martin van Vliet. Analysts had predicted the economy forged around nations sharing the euro currency would expand by 0.6 per cent in the third quarter. However, Friday"s data also highlights that a key test facing both the European Central Bank and European governments in the coming months is when to draw down the massive monetary and fiscal programs they launched to help counter the downturn. This is especially the case as the release of the latest growth data coming against the backdrop of a growing sense of uncertainty about Europe"s economic outlook, amid concerns that an acceleration in unemployment could undercut private consumption. At the same time, a strong euro is fuelling worries about the prospects for the eurozone"s key export machine. "For now, there is scant evidence of the pickup in domestic demand needed to sustain a strong recovery and help to re-balance the global economy," said Jonathan Loynes, chief European economist with the economics research group Capital Economics. Spearheading the pickup in the eurozone"s economy was a solid performance by the region"s biggest economy, Germany, which turned in a 0.7-per-cent growth rate in the third quarter. The currency bloc"s two other big economies - France and Italy - also posted gains in growth during the third quarter. Italy grew for the first time in about a year, expanding by a 0.6-per-cent quarter on quarter. France expanded by 0.3 per cent in the three months under review. Together Germany, France and Italy represent about two thirds of the eurozone"s economic activity. The eurozone shrank by 0.2 per cent in the second quarter. But underscoring the fragile state of the eurozone recovery, the third-quarter growth rates in both France and Italy came in below forecasts. While analysts had predicted the Italian economy to grow by 0.8 per cent, they had expected French growth to come in at 0.6 per cent. The French economy shrank by 2.4 per cent year on year on year in the third quarter and by 4.6 per cent in Italy. Moreover, the British and Spanish economies remain mired in recession, contracting by 0.4 per and 0.3 per cent respectively. Also dragging down the EU growth rate during the third quarter was a weak performance by several economies in Central Europe. While growth in Estonia tumbled by 2.8 per cent quarter-on-quarter, the Hungarian economy shrank by 1.8 per cent and Romania"s by 0.7 per cent.
