Mixed fortunes

By J.S., P.W. and L.P.

How economies have fared since their pre-recession peaks

THE prayed-for recovery in the euro area has finally come to pass. After a dismal 18 months in recession, GDP rose by 0.3% (an annualised rate of 1.1%) in the second quarter from its level in early 2013. The upturn was led by Germany, whose GDP grew by 0.7%. France outperformed expectations, with output up by 0.5%. The rate of decline in Italy and Spain slackened and there was a sharp rebound in Portugal, which has suffered a deep recession. Nonetheless, the pickup still leaves GDP across the euro area 0.7% lower than a year ago. Declines have been biggest in tiny Cyprus, where GDP is down by 5.2%, and in Greece, where it has fallen by 4.6%. And the record of the euro-zone economy since the peak reached before the global financial crisis is even more depressing. Output is still 3% lower; in America it is more than 4% higher. Among the big euro-zone economies only German GDP now exceeds its pre-crisis peak, by 2%. A recent European Central Bank survey forecast that GDP for the whole of 2013 would be 0.6% lower than in 2012, and that it would grow by only 0.9% in 2014. The end of the recession will give heart to European leaders but weak growth will still leave the euro area vulnerable to social and political discontent. See full article.