Dangerously deflated eurozone

15 May 2009 By Ian Campbell

The pace of decline has been shocking. Germany has lost three years growth in just two quarters and the fall isn t over yet. Rising unemployment could push markets and prices down, encouraging the ECB to print more money. So deflation now could mean inflation later.

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Context News

Context news: The economic output, or gross domestic product, of the sixteen countries that make up the eurozone declined by 2.5% in the first quarter and by 4.6% compared with the first quarter of 2008, Eurostat, the EU statistical agency, reported on May 15. Eurostat also reported that annual consumer price inflation in the eurozone was 0.6% in April, the same as in March.

The German statistical body reported that the German economy contracted by 3.8% in the first quarter.

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