Rabobank Group

9-10-2009 | Economic news

For the third quarter of 2009, the available economic data confirms that the big economies of the euro zone are past the worst of the economic downturn. But, although Germany and Spain will probably take a step further out of recession, a resumption for economic growth is not a ‘done deal’ yet in Spain and Italy. Rabobank Economic Research Department has produced monthly update reports for the largest euro zone economies.

Germany – To V, or not to V: that’s the question? 
The victory of the business-friendly “black-yellow” coalition is good news for the German economy. Now they can deliver on their promises in order to bolster the economy. Unemployment has so far remained in check only because of statistical manipulation and the government’s short-shift scheme. The sudden drop in industrial production and retail sales is also another reminder that the recovery will not be V-shaped. 

France – Weathering the storm 
Partly due to the active role of the state in everyday economic life, the performance of the French economy during the crisis is remarkably better than that of most other industrialized countries. The slight positive growth in the second quarter was a pleasant surprise. However, the accompanying substantial budget deficits and rapidly rising private sector unemployment do present the bill of this economic strategy. 

Italy – End of recession drawing closer
The Italian economy benefits from the global economic turnaround and the end to the recession seems to draw closer. Mind you, ‘drawing closer’ is not synonymous to ‘done deal’.

Spain – Approaching a plateau 
The available data for the 3rd quarter of 2009 gives a mixed picture of the state of the Spanish economy. The pace of economic contraction seems to be easing, yet the recession lingers on. The Spanish economy seems to be approaching a plateau, where the economy will cease to contract. It is uncertain if this plateau will be the bottom of this downturn, or just a temporary reprieve on the way down.

The Netherlands
The Dutch economy has benefited from the stabilisation of world trade. The contraction in the second quarter of this year at 1.1% (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. 

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 new Monthly Update for The Netherlands update will be added 4 November.