Eurozone Economy Shrinks

Last year, the European economy shrank 0.3 percent in the fourth quarter. The IMF has forecast a 0.5 contraction throughout 2012. Both France and Germany beat analyst predictions. All Northern European countries, with the exception of the Netherlands either grew or exceeded analyst expectations.

Weakness was concentrated in the heavily indebted south. Based on these numbers, Italy, Belgium, Greece, and Portugal are all in recession. Business confidence has been further hampered recently by the lack of resolution of the current Greek bailout, required for Greece to not default on its next debt payment. Greece’s economy contracted by 7 percent in 2011.

Source: Reuters

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.