The ‘growth pause’ in 2003

Euro area GDP slowed, starting in the first quarter of 2001. A weak resurgence of positive growth at the beginning of 2002 seemed to have come to a new halt. Employment grew somewhat, while industrial production, after having fallen sharply in 2001, showed weak signs of recovery. Investment had been declining for more than two years, but government consumption rose 2.2% in 2001 and 2.7% in 2002.

Figure 10 Euro area GDP, 1980s vs 2001 onwards (Click to Zoom)

Notes to the figure:

Qualitatively, there are some resemblances between the behaviour of GDP in 2001/2 and in the 1980s recession. No sharp fall was recorded in 2001/2, nor was there more than a single quarter’s decline in sequence. And in contrast to the 1980s episode, employment did not decline. The Committee’s judgment was therefore that the euro area experienced a prolonged pause in the growth of economic activity rather than a full-fledged recession (as defined by the Committee).

More information on these episodes can be found on page 4 of the Committee's 2003 findings [PDF]