Europe Economy – An Insight

In the year 2008, it was estimated that Europe has a population of 800,401,065. As per the figures announced by IMF, Europe Union is all set to generate €12 581 billion of nominal GDP for the year 2008. the adjusted rate of unemployment in Europe was around 6.7 in March 2008.

The economy of Europe is highly influenced by the activities of European Union. As per the data received on January 1, 2007, the Union of Europe had twenty seven member nations. The official currency of European Union is Euro. It is used in the Euro Zone comprising fifteen member nations of European Union.

European Economy Performance in the year 2007 – 2008

All through the year 2007, Europe had maintained vigorous economic performance in the face of worldwide inflationary pressures, US mortgage loan crisis and global slowdown of economic growth rate. Both Organization for Economic Cooperation and Development and International Monetary Fund had hailed economy of Europe for its great performance in face of global instability in the year 2007.

However, situations became worse from the later half of the year 2008 onwards. Some of the European nations such as the United Kingdom, Spain and Italy later run into financial crisis. Officially, Denmark entered into recessionary phase. Ireland too, scaled down its growth expectations to nil. Spain witnessed no growth. And United Kingdom entered into the phase of recession.

Germany, the biggest and the flourishing economy of Europe also experienced economic difficulties. Market analysts and experts argue that strong Euro, declining demand and increasing costs have all together led to this situation. Banks all over Europe have cut down on lending activities meant for both

individual entities and corporates. In order to control inflation, the European Central Bank (ECB) announced 0.25 hike on on July 2, 2008 of key lending rate in Europe.

Hikes in raw material, food prices and oil prices had pushed inflation rate to 4 per cent in June 2008 in Europe. Spain, Ireland and Britain have recorded a major decline in consumer spending in this period. However, in terms of employment, apart from Britain, almost every other region has recorded fairly good figures. Moreover, there has been rise in jobs related to tourism. Hospitality sector and health care. There have been major loss in banking sector jobs though. This information is based on the job survey data conducted in June 2008.