The euro zone economy was still in decline at the start of the financial year, although the downward trend was significantly slower in the first quarter of 2009/2010 than in the previous quarters. In the period from January to June, euro zone countries recorded growth in GDP again, as shown in the following chart. Investments in equipment also began to pick up again. The main impetus for economic growth came from foreign trade and the construction industry, which made up in spring some of the output lost to the exceptionally hard winter. The third quarter of 2009/2010 in particular saw substantial growth in the euro zone economy, with the biggest quarter-on-quarter increase in the financial year. The rise was primarily driven by highly cyclical forces, such as the global upturn and low interest rates. The German economy also made a substantial contribution to growth. Excluding Germany, the increase in euro zone GDP was much more subdued; uncertainty about the debt situation in some countries such as Greece and the UK had particularly adverse effects.

The German economy also recovered steadily throughout financial year 2009/2010. Although real GDP fell by 2.0 percent in the first quarter, in the next quarter it grew by 3.1 percent year on year. According to Oxford Economics, the fourth quarter of 2009/2010 showed growth of no less than 3.7 percent. The largest share of growth came from additions to inventories. Alongside a continuation of healthy foreign demand, domestic orders also picked up significantly.

The following overview shows growth in real GDP compared with the prior-year period:

Real GDP Growth Year on Year