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Euro Challenge 2012 The Current Economic Situation The Euro Area Economic Situation – March 2012 The euro area economy as a whole contracted (i.e., growth was negative) at the end of 2011. In 2012, the euro area will likely undergo a mild recession (a period of negative growth) but is expected to stage a gradual recovery in the second half of this year. Already, there are signs of stabilization, and recent measures taken by the ECB and European leaders are helping to overcome the "euro crisis". Key concepts Gross Domestic Product (GDP) is the value of all goods and services produced in a geographical region over a period of time (years, quarters, months). GDP growth tells you by how much GDP increased in a given…show more content…
In January 2012, the average unemployment rate for the euro area rose to 10.7%. This means that one out of ten workers is out of a job. In some countries, young people are particularly affected (e.g., Spain, Greece). Behind the 10.7% average figure is a huge disparity in unemployment rates between euro area countries. The unemployment rate in Austria is just 4%, while in Spain it is over 23%. The unemployment rate is expected to stabilize and gradually decline as growth recovers later this year. But it is bound to stay painfully high in countries that must cut spending sharply to get debt levels down. 2013 Inflation Rate 5.0% 4.0% Inflation 3.0% 2.0% 1.0% 0.0% Source: Eurostat European Commission 2013 2010 2009 2008 2007 -1.0% 2006 Inflation rose steeply in the beginning of 2011 as a result of higher energy and commodity prices. Inflation has gradually declined and is
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