Eurozone emerges from recession

The news that the eurozone economy has emerged from recession after growing between July and September will be welcomed in Malta which has strong commercial links with leading eurozone countries such as Germany, France and Italy.

Malta is still in recession and is not expected to witness economic growth this year. During last week's Budget speech in Parliament Finance Minister Tonio said the government was forecasting that the economy would contract by minus two per cent this year but there would be GDP growth of 1.1 per cent in 2010. Mr Fenech is hoping to see signs of an economic recovery in Malta in the first half of 2010.

The eurozone as a whole grew by 0.4 per cent in the third quarter this year after shrinking by 0.2 per cent between April and June. The EU also grew, by 0.2 per cent in the third quarter.

The French and German economies, which both have significant investment in Malta, both grew for a second consecutive quarter, at 0.3 per cent and 0.7 per cent respectively, confirming the eurozone's two largest economies are out of recession.

Germany, France and Japan ended year-long contractions in the second quarter of the year, while the US has since joined them after its economy grew in the third quarter.

The UK, however, remains in recession, having contracted by 0.4 per cent between July and September.

The UK, Europe's second largest economy, has now contracted for six consecutive quarters, the first time this has happened since quarterly figures were first recorded in 1955.

Every country's recovery takes a different path, and Malta is no exception. It entered into recession after most European countries did, but these latest figures are nevertheless good news for Malta.

Analysts believe Europe's recovery is due to a number of factors such as increased exports from the continent, stronger consumer spending, as well as the various economic stimulus packages in Europe. Germany, for example, boosted its economy by pumping €85 billion of taxpayers' money into it.

Malta's stimulus package this year consisted mainly of direct help to manufacturing companies and the tourism industry, as well as increased support for SMEs, as announced in last week's budget.

The latest EU figures also showed that Italy, Austria and Slovakia emerged from recession in the third quarter. Spain, however, is still in recession and its economy contracted further in the third quarter this year.