Rabobank Group

29-9-2009 | Economic news

The past few months have seen increasing signals that the worst of the recession is over for the global economy. For Europe, the combination of government measures and a turnaround in the worldwide inventory cycle play an important part in a recovery. Rabobank Economic Research Department has produced monthly update reports for the largest euro zone economies.

The Netherlands
The Dutch economy has benefited from the stabilisation of world trade. The contraction in the second quarter of this year at 0.9% (quarter-on-quarter) was accordingly less pronounced than the unprecedented contraction of 2.7% in the first quarter. International trade is providing something of a foothold but not much stability. After a substantial contraction in the current year, we can only conclude that the envisaged recovery will be meager in 2010. 

Germany
The German economy surprised on the upside in the second quarter, growing by 0.3% (quarter-on-quarter) following four consecutive quarters of decline. Looking closely at the breakdown, it becomes apparent that the underlying economic fundamentals are still weak. The largest contribution to GDP growth came from net exports, fed by ongoing weakness in imports, rather than a meaningful surge in exports.

Italy
The Italian economy benefits from the global economic turnaround and, as a result, posted a much milder rate of contraction in the second quarter than it did in previous quarters. There are a number of weaknesses in the economy that prevent us from being overly confident about an imminent ending of the current recession, though. Economic contraction is likely to extend into the second half of the year.

Spain
In the second quarter, the Spanish economy contracted for the fourth consecutive quarter. Although the 1.1% contraction was smaller than that of the first quarter, Spain lags the euro zone economy as a whole, which contracted by only 0.1%. The available data for July and August indicate that the Spanish economy will continue to trail the euro zone economy in the third quarter.

The Rabobank Economic Research Department follows, analyses and predicts financial and economic developments in the Netherlands and around the world. In the near future, more economic research will be available online in English. The France update has added the Western Europe October article.