“Europe’s economy contracted in the fourth quarter as investment declined by the most since 2009 and exports and consumer spending dropped.
Gross domestic product shrank 0.3 percent from the third quarter, the European Union’s statistics office said today, confirming an estimate published on Feb. 15. Exports fell 0.4 percent after a 1.4 percent gain in the previous three months, while household spending declined 0.4 percent and investment dropped 0.7 percent.
While Europe is facing its second recession in less than three years, the economy shows “tentative signs of stabilization,” European Central Bank President Mario Draghi has said. ECB efforts to pump cash into the economy have helped ease concern about a credit crunch and won governments time to agree on measures to contain the debt crisis.
“The region is still facing major headwinds, notably including increased fiscal tightening in many countries and markedly rising unemployment,” said Howard Archer, chief European economist at IHS Global Insight in London. “Despite some recent overall improvement in euro zone surveys and evidence that Germany is returning to growth, we doubt that the euro zone will be able to avoid further contraction in the first quarter of 2012 and very possibly the second.’”
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