Wednesday, the Euro area unemployment rate increased to a near three-year high in February as industries cut their workforce on falling economic activity. In Germany, retail sales unexpectedly declined in February as the deepening recession squeezed private consumption.

In other news, Managing Director of International Monetary Fund, Dominique Strauss-Kahn said in an interview to a Spanish newspaper El Pais that the global economy is expected to contract in the range of 0.5% to 1% in 2009. The exit could happen in the first two quarters of 2010, provided right economic polices are adopted, he said.

Elsewhere, the Fitch Ratings predicted a severe and abrupt recession for Emerging Europe in 2009. The region's gross domestic product is expected to shrink 3.1% this year compared to a 4% growth in 2008 and an average of 6.8% in the five years to 2007.

Eurozone

Eurozone jobless rate stood at 8.5% in February, the highest since May 2006, compared with January's revised 8.3%, the Eurostat reported. The jobless rate stood above the expected 8.3% and the 7.2% recorded in February 2008. The statistical office upwardly revised the unemployment rate for January from 8.2%.

The pace of decline in Eurozone manufacturing activity slowed in March compared to the fall seen in February, reports said citing survey data from Markit Economics.

The purchasing managers' index, or PMI, for the Eurozone manufacturing sector rose to 33.9 in March from a record low of 33.5 in February, but down from a preliminary estimate of 34. A PMI reading above 50 indicates expansion in the sector, while below 50 suggests contraction.

According to provisional data released by the Federal Statistical Office, Germany's retail turnover in real terms decreased 0.2% month-on-month in February after falling 0.9% in January. The decline was in contrast to a 0.3% increase forecast by economists.

Malta's National Statistical Office announced that the industrial producer prices dropped 2.2% year-over-year in January, compared to the 0.9% decline in the previous month.

Rest of Europe

UK's housing equity withdrawal was estimated at minus GBP 8 billion in the fourth quarter, a quarterly report from the Bank of England revealed. The negative number implies that individuals injected a net total of GBP 8 billion into housing equity in the fourth quarter. Economists had expected a negative balance of GBP 6.8 billion.

Alistair Darling, the Chancellor of the Exchequer announced Tuesday that UK's business rates will rise only 2% from April 1, and the remaining 3% would be spread over the coming two years. The rates were due to go up by 5% from today. Last minute, the government gave more time to pay business rates.

The Swiss SVME PMI stagnated at a record low of 32.6 in March, a report from Credit Suisse showed. Economists had expected the reading to rise to 33 in March. The index has not posted a further fall for the first time in 15 months.

Russia's PMI for the manufacturing sector stood at 42 in March, increasing from a reading of 40.6 in February, the VTB Capital reportedly said. The index remained in contraction for the eighth consecutive month in March, marking a longer period of contraction than in 1998.

Sweden's seasonally adjusted PMI for the manufacturing sector rose to 36.7 in March from 33.9 in February, a survey by Silf and Swedbank said. Economist expected a reading of 34.4. A year ago, the index stood at 54.7.

Sweden's Finance Minister Anders Borg lowered GDP estimates for this year and the next two years as economic crisis lowered demand. The ministry now expects the economy to contract 4.2% in 2009, a sharp revision from its December forecast of a 0.8% decline.

Hungary's general government's deficit stood at 3.4% of GDP in 2008 compared to 4.9% in 2007, a preliminary report from the Central Statistical Office showed.

Moody's Investors Service lowered Hungary's government bond ratings and the country's foreign currency bank deposit ceiling to Baa1 from A3, and gave a negative outlook for the rating. The rating agency said the action reflects the impact of the current economic crisis on the Hungarian government's financial strength.

Moody's also lowered the outlook on Slovenia's Aa2 government bond ratings to stable from positive, to reflect the effects of the global economic downturn on the country's economic performance.

Statistics Denmark announced that the retail sales increased 0.9% month-on-month in February, after rising 0.7% in the previous month. In December, retail sales were down 1.6%.

Kazakhstan's consumer prices climbed 8.9% year-on-year in March, faster than an 8.7% rise in the previous month, the country's statistical office said.

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