Growth figures for the fourth quarter indicated the recession prevailing in Europe and Japan

Recession prevailing in Europe and Japan

Recession prevailing in Europe and Japan


Last week’s biggest news was the publication of the fourth quarter’s growth data.

We briefly note that a sharper than expected contraction was recorded in Germany (-0.6% in quarterly terms), France (-0.3%), Spain (-0.7%) and Italy (-0.9%).

We note that the Eurozone economy shrank for the third consecutive quarter, and by the sharpest rate recorded since the first quarter of 2009 (quarterly rate of -0.6% in the fourth quarter, compared with forecasts to -0.4%).

Regarding the Eurozone’s future growth, the expectation surveys published in the last two months indicate a slight improvement in companies and consumers’ assessments of the future growth, though the level of the expectations surveys remained relatively low, and still points to expectations for further contraction of the Eurozone economy.


The negative trend recorded in the global economy during the last quarter of 2012 affected the Japanese economy as well, which shrank, for the third consecutive quarter, to a level of -0.1% (quarterly rate) compared with a quarterly growth forecast of 0.1%.

World leaders turned to the new Japanese government to stop trying to weaken the Japanese Yen, after it weakened by 15% against the dollar since early November 2012.

However, the recession prevailing in Japan will probably continue to support a continued aggressive monetary and fiscal policy of the Japanese authorities, in order to accelerate the growth rate of the Japanese economy.

Emerging Markets

The economic contraction recorded in most of the developed markets during the last quarter of 2012, led to the slowdown in the growth rate of emerging markets.

The GDP data of Poland and Russia pointed to a more moderate pace of economic growth, while in Hungary and the Czech Republic a relatively sharp economic contraction was recorded.

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