The eurozone has seen a surprise increase in industrial production, which increased by 1.2% in August it was revealed. The statistics office for the EU, Eurostat, said that this number meant only a 5.3% increase for the entire year. This news could mean worries that the eurozone could head back into recession are eased.
Economists had believed that production would increase 2.2% yearly and fall by 0.7% each month. August’s 1.2% increase comes after a 1.1% increase in July. Germany saw output falling 1% each month, but had an output of 7.8% higher than last year. The Irish Republic saw an increase of 4.4% in August and a yearly jump of 10.1%.
The rest of the economy has, overall, slowed, with overall growth revised down for all of the major economies in the area. The UK has seen a revision down from growth in the second quarter of 0.2% to 0.1%, with the economy in the months since July slow as well. In addition, the growth for the first quarter was also revised down, with the 0.5% down to 0.4%, meaning the economy essentially flat lined during the first six months of the year, as the last quarter of the previous year had seen a decline of 0.5%.
The rise in production in the eurozone is good news for the global economy, which is fearing another recession due to the sovereign-debt crisis and financial concerns that come with low growth.
The Troika, comprised of the EU, the IMF, and the European Central Bank, have begun to reach agreements with Greece on the bailout plan for the country, saying that Greece is likely to get the eight billion euros, or £7 billion, even though the fiscal target for Greece’s 2011 budget was deemed unachievable. However, the Troika said that Greece’s 2012 deficit target should be met. Greece blamed the economic crisis for their fiscal targets inability to be met, but according to the Troika’s statement, it is “partly because of a further drop in GPD, but also because of slippages in the implementation of some of the agreed measures”.
The inspectors said they thought Greece was committed to austerity measures but that they would have to ensure implementation of the fiscal measures for the 2012 budget in order to keep the funds.