The Eurozone economy probably contracted in the three months to June, extending the weakness seen in the past quarters, as the worsening crisis pushed bigger economies into recession.
Economists expect a 0.2 percent contraction in the gross domestic product in the second quarter to follow the region's narrow escape from a technical recession in the previous three months.
The 17-nation economy stalled during the first three months of the year following a 0.3 percent fall in GDP in the fourth quarter. Eurostat is set to release the data at 5 am ET on August 14.
Two of the biggest economies of the region are also set to release data on their second quarter economic performance tomorrow. Among the big four, Spain and Italy reported their numbers earlier.
Germany's Federal Statistical Office is scheduled to publish the second quarter GDP figures at 2 am ET. The largest Eurozone economy is seen expanding 0.2 percent in the second quarter, with the growth rate decelerating from 0.5 percent recorded in the first quarter.
French GDP data is expected at 1.30 am ET on Tuesday. The second biggest euro economy is forecast to shrink 0.2 percent quarter-on-quarter in the second quarter after stagnating in the first three months of the year. The Bank of France has forecast a similar size contraction for the third quarter, which would push the economy into recession.
Investors continue to flee the single-currency bloc in search of safe havens and as a result, some of the troubled economies are facing unacceptably high borrowing costs. Unemployment in the region remains at an all-time high and market surveys are pointing to sharp contraction in both manufacturing and service sector outputs.
European Commission expects the Eurozone economy to shrink 0.3 percent this year, and expand 1 percent in 2013. The Organization for Economic Co-operation and Development (OECD) sees 0.1 percent contraction in economic activity in 2012, before returning to growth in 2013.
Other Eurozone countries releasing the GDP figures on Tuesday are Austria, the Netherlands, Portugal, Cyprus and Slovakia.
Portugal, which received a EUR 78 billion international bailout last year, is expected to report a deeper 0.8 percent contraction in economic output during the second quarter. The Austrian and Dutch economies grew 0.3 percent each sequentially in the first quarter, official data showed.
According to preliminary official estimates released recently, the Spanish and Italian economies suffered deeper recessions in the second quarter with the poor economic performance aggravating their fiscal woes.
Spain's GDP sank 0.4 percent in the second quarter of 2012 after a 0.3 percent decline each in the previous three months and in the fourth quarter of 2011. Italy's GDP dropped 0.7 percent sequentially, following a 0.8 percent decline in the previous quarter.
Greece had a 6.2 percent contraction in the second quarter, slightly better than the 6.5 percent decline in the first quarter, the Hellenic Statistical Authority said Monday. The country is in its fifth year of recession.
Professional Forecasters surveyed by the European Central Bank expects the Eurozone economy to shrink 0.3 percent this year and to grow 0.6 percent in 2013.
ECB has indicated its readiness to resume government bond purchases if the economic situation deteriorates further. After the August meeting, ECB President Mario Draghi said the policy makers "will consider undertaking further non-standard measures" if conditions deteriorate.
by RTT Staff Writer
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