The economies of Europe are in poor economic health. In the first quarter of 2013 overall growth within the Eurozone was negative for a sixth consecutive quarter and it is forecast to contract by 0.6% this year. Meanwhile the UK managed to avoid a triple-dip recession by recording a growth rate of 0.3%, however inflation is still above the 2% target (particularly food and energy inflation which is the highest in western Europe), and the unemployment rate remains stubbornly high.
Europe, in particular the 17 nations that share the single currency have become a serious drag on the global economy, however, as the chart below shows, conditions across the region very considerably.
Map of Europe showing economic data for various economies (Click on the chart for a larger version)
Key: Blue numbers = GDP growth rate, orange numbers = inflation rate & purple numbers = unemployment rate. Data courtesy of tradingeconomics.com.
The strongest growth rates in Europe can be seen in Latvia and Lithuania which are growing at an annualized rate of 3.1% and 3.5% respectively. However, while economic growth is brisk, unemployment remains a real problem. In Lithuania for example, the unemployment rate is currently 13.1%.
At the other end of the scale with have Greece whose annual GDP growth rate is contracting at 5.3% and where unemployment is 27%. Greece, along with Spain and Cyprus, is experiencing deflation with the cost of living (as measured by the CPI) actually falling.
Since Mario Draghi, head of the European Central Bank pledge to do “whatever it takes” to save the single currency, financial conditions (particularly with regard to borrowing costs) have improved significantly. However, the Eurozone remains mired in recession, and without meaningful systemic reform it is likely to remain that way.