Analysts expect the economy to shrink by around 0.5 percent for 2013, slightly worse than the commission’s 0.4 percent forecast, followed by a modest expansion next year.
“A sustained recovery is now within reach but only if we persevere on all fronts of our crisis response,” Rehn said.
Eurozone states must “keep up the pace of economic reform, regain control over our mountain of debt...and build the pillars of a genuine economic and monetary union with no loopholes where irresponsible bankers or short-sighted policy makers can thrive,” he warned.
In Germany, which faces polls in September, Chancellor Angela Merkel has made a virtue out of the need for austerity as an essential foundation for a return to growth.
France, however, has led calls to put the emphasis on growth and jobs, with the EU seeking to find a difficult middle ground between the two.
The data showed that Germany, Europe’s powerhouse economy, grew 0.7 percent, while France expanded 0.5 percent, way ahead of forecasts for just 0.2 percent.
The French figures were the best since the first quarter of 2011 and significant given how the eurozone’s second-ranked economy has struggled for momentum, burdened with heavy debt and an increasingly uncompetitive export sector.
Positive But Cautious
Analysts were positive on the figures but cautious on the outlook--the eurozone may be returning to growth but its performance is anaemic compared with other major economies and the debt crisis refuses to go away.
Unemployment too remains at a record high 12.1 percent and lurking in the background are concerns the debt rescue program for twice bailed-out Greece could unravel.
“The indebted countries of the periphery are still mainly in recession and a very long way from the rates of expansion needed even to begin to eat into their enormous debt burdens,” said Jonathan Loynes of Capital Economics.
“The eurozone’s recession may be over--for now at least--but the debt crisis in the periphery is decidedly not.”
For Tom Rogers, senior economic adviser at EY Eurozone Forecast, the north-south divide remains a key concern, potentially undermining efforts to deliver eurozone-wide solutions and further pressurising national governments.
“Equally worrying, the pace of recovery in the strongest economies is unlikely to be sustained in the second half of the year,” Rogers said.
More needs to be done if the apparent recovery of the past few months is to be more than simply a bright spot in an otherwise difficult few years.
In a separate note, Capital Economics said the growth data so far this week confirms a global uptick.
However, growth at current rates will leave a lot of spare capacity and daunting debt burdens in many countries.
Other figures showed that the full 27-member EU grew 0.3 percent in the second quarter compared with the first when it shrank 0.1 percent.
Among non-euro members, Britain grew 0.6 percent, confirming recent stronger indicators.
Comparable figures for the United States and Japan came in at 0.4 percent and 0.6 percent, respectively.
The eurozone recession had been a drag on global growth, slowing down emerging markets as well, making it more difficult for European countries to rely on exports to lift their economies as reforms dented demand at home.
The Bank of England’s pessimistic forecasts on unemployment will lure households and businesses into amassing more debt, said economists, as interest rates remain at a record low.
Last week, newly-minted Bank of England Governor Mark Carney said rates would remain on hold at 0.5 percent--subject to ‘knockout’ conditions on inflation--until unemployment fell below 7 percent, a target the bank says won’t be met for three years, CNN reported.
Data showed that the UK jobless level remained unchanged at 7.8 percent in the three months to June, falling by just 4,000 jobs.
George Buckley, chief UK economist at Deutsche Bank, told CNN that the central bank’s measures were too complicated and could ‘backfire’.
Spanish Services Turnover Down 4.2%
The turnover of services sector in Spain fell by 4.2 percent in June compared to the previous year, according to data published by the National Institute of Statistics (INE).
On a monthly basis, the services sector turnover decreased by 2 percent compared to May, China.org wrote.
June marks the second month of consecutive declines in the services sector, a key element for Spain’s economic recovery as it includes hotel and tourist industry. The sector had increased its turnover by 0.6 percent in April after 19 months of declines to fall again in May and June.
The INE reported that employment fell by 1.4 percent in the services sector compared to the same month in 2012, while in May it decreased by 1.1 percent.
All regions in Spain saw their services sector turnover decrease except the Balearic Islands which saw an increase of 6.5 percent in turnover and a 3.5 percent increase in employment.
The case of the Balearic Islands shows the importance of tourism for the Spanish economy as such figures could not be possible without the high number of tourists visiting the archipelago in the peak season.
Spain is the second most important tourist destination in terms of receipts and the fourth most important in the world in terms of visitor numbers, according to the United Nations World Tourism Organization.
More than four million people in Spain are out of work resulting in an unemployment rate of over 26 percent. The number of the unemployed fell by 64,886 in July thanks to the tourist season when employers take on more workers to face high demand.
Most contracts registered in summer are temporary so unemployment rate is expected to rise again after the tourist season.
Demand for Gold Hits Record High
Bargain-hunters are snapping up gold jewelry and coins as investors desert the metal and world prices plunge.
Global consumer demand for gold hit its highest level ever in the second quarter, spiking to 1,083 tons, up 53 percent compared to the same time last year, CNNMoney wrote.
Most of that demand came from China and India, where consumers rushed to buy jewelry, coins and gold bars.
The latest report from the World Gold Council showed that jewelry sales made up more than half of the total gold tonnage sold to consumers in the quarter.
The average price for gold over the period fell by 12 percent to $1,415 per ounce.
Gold is currently trading at just over $1,330 per ounce, down by roughly 30 percent from its all-time high near $1,900 hit in September 2011.
Is it time to buy gold now?
The precious metal is typically seen as a safe haven for investors during difficult economic times. With the major developed economies recovering, many investors now see little reason to own the precious metal.
Marcus Grubb, managing director for the investment unit at the World Gold Council, said the gold market was going through a period of rebalancing as predominantly American investors in exchange-traded funds dumped their holdings and a wave of demand came from consumers.
Asian Growth Fails to End Poverty
Asian policymakers need to enforce more effective state actions to reduce high poverty and sustain growth, according to a new study released on Thursday by the Manila-based Asian Development Bank (ADB) and the National University of Singapore (NUS).
“Asia’s future prosperity will only be assured if countries continue the fight against poverty and other areas of deprivation, and this will require proactive state intervention,” Kazu Sakai, director general of ADB’s Strategy and Policy Department, said in a statement, Xinhua reported.
“As the deadline for the MDGs looms in 2015, this study provides a timely reminder of the vast unfinished business in the region and the steps needed to end deprivation across the board.”
The new study,”Ending Asian Deprivations”, revealed that despite the gains posted by several Asian economies, more than 660 million people in the region continue to live in extreme poverty, subsisting on less than $1.25 a day.
The study said that if you include those who are highly vulnerable and can easily revert to extreme poverty, this figure could rise to 1.5 billion people or nearly one in every two Asians.
The study said most Asian countries aren’t likely to attain their Millennium Development Goals (MDGs) by 2015 as they still grapple with lack of basic sanitation, a big number of underweight children and high infant and maternal mortality incidence.
This calls into question the current development paradigm based on a focus on maximizing growth, if such development leaves so many of Asia’s citizens in dire poverty and hunger, the study said.
The study recommended that Asian governments need to support skills development, delivery of quality education, and incentives for entrepreneurs. These measures must be implemented with the private sector and civil society. Policymakers also need to encourage the growth of small-and-medium enterprises as they provide employment to a great number of people.
Asian policymakers also need to finance infrastructure development, improve urban environments, social protection programs, and remove gender inequities and labor market rigidities to boost employment opportunities.
The study also emphasized that any successful new development approach must have clearly defined goals, a definite timeframe, a credible strategy to achieve them, a detailed list of public interventions and tailored to address the needs of a specific country or region.
Asalouyeh Tops Iran’s Exporters
Asalouyeh Customs Department exported over 2.572 million tons of commodities worth $1.761 billion during March 21-July 22, ranking first among the most active customs nationwide
Shahid Rajaei Customs Department was placed second in the period by exporting 8.04 million tons of goods valued at $1.491 billion, followed by customs departments of Imam Khomeini, Tehran, Mashhad, Shahid Bahonar, Bushehr Special Zone, Isfahan, Arak and Tabriz respectively.
Over 59 percent of Iran’s exports in terms of weight and about 65 percent of exports in terms of value pertained to the ten aforesaid customs departments during the four months.
Other Iranian customs departments accounted for 41 percent and 35 percent of total exports in terms of weight and value respectively in the period.
Located on the shore of the Persian Gulf 270 km southeast of the provincial capital of Bushehr, Asalouyeh is best known as the site for the land-based facilities of the huge Pars Special Energy Economic Zone (PSEEZ) project underway since 1998.
Semnan Earns $52m
The central province of Semnan exported 143,000 tons of goods worth $52 million during March 21-July22.
Hamid Reza Madah, the deputy caretaker of Industries, Mines and Trade Organization of Semnan province for foreign development, added that detergents, gray cement, tiles, waterproof insulators, pipes and iron profiles, polyethylene synthetics, lead ingots, disposable dishes and flour were among major exports.
“A number of countries, including Germany, Iraq, and Afghanistan, UAE, Syria and Central Asian states comprised target markets in the period,” he said.
The official also said the province imported 7,000 tons of goods valued at $17 million in the period.
“Cotton, machinery, raw materials for factories, electricity transformers, halogen bulbs, computer parts, batteries and auto spare parts accounted for a large portion of imports in the period,” Madah said.
Semnan covers an area of 96,816 square kilometers and stretches along Alborz Mountain.
Markazi 8th Top Exporter
Translated by Shahrokh Saei
The central province of Markazi accounted for 3 percent of Iran’s total exports during March 21-July 22.
Jafar Asghari, the deputy head of Markazi Industries, Mines and Trade Organization, also said Markazi’s exports ranked eighth among other provinces in the period, YJC reported.
“Over 355,000 tons of non-oil products worth $258 million were exported form Markazi province during the four months, indicating a rise of 28 percent and 12 percent in terms of weight and value respectively compared with the corresponding figure of last year,” he said.
The official added that 71 percent of Markazi exports in the period pertained to industrial products, while chemicals and petrochemicals comprised 21 percent of exports.
“Mineral and agricultural products as well as processing industry constituted 8 percent of the province’s exports,” he added.
Hydrocarbons ($40 million), cast iron, iron and steel dishes ($35 million), aluminum ingots ($31 million), polyethylene ($20 million), polypropylene ($17 million), polyethylene ($14 million), synthetic fibers ($12 million), tanks for storing different products ($7 million), ethylene ($7 million) and cement ($6 million) were the major export products.
“Markazi dispatched its products to 34 countries, among which three states were major target markets,” he said.
Czech economy swung back to growth in the second quarter of 2013 after six consecutive quarterly contractions, the Czech Statistical Office said in a preliminary estimate.