Euro Zone''s 15 Nations Declares Recession

November 14, 2008 7:51 a.m. EST

Brussels, Belgium (AHN) -- After Germany and Italy officially declared recession status, it was the turn of the entire 15-nation euro zone to make a similar declaration Friday.

It became official after EU data showed the zone's economy contracted by 0.2 percent for the third quarter, similar to the same rate of shrinkage the euro zone registered from April to June.

Germany and Italy logged third quarter declines on their gross domestic products by 0.5 percent for July to September and 0.4 percent for the second quarter. France narrowly missed joining the recession club because it had a 0.1 percent GDP growth rate in the third quarter after it had a minus 0.3 percent growth in the previous quarter.

The larger 27-member EU bloc has yet to come out with Q3 data on its GDP growth rate, although indicators point to negative news ahead since new passenger cars statistics showed a 14.5 percent decline in October. The EU logged a zero percent growth rate from April to June.

Gilles Moec, senior economist of Bank of America, forecast more quarters of negative GDP growth rates until Q3 2009 because the full impact of the credit market crisis has not been felt yet in the Q3 GDP data and the rising unemployment rates on consumer spending. Moec said the euro zone will likely suffer a 1 percent GDP contraction next year.