The euro zone economy saw its deepest contraction on record in the fourth quarter of 2008, data showed, hit by a record weak performance in Germany as well as deeper-than-expected falls in output in France and Italy.
Gross domestic product in the 15 countries using the euro in the last three months of 2008 shrank 1.5 per cent against the previous quarter for a 1.2 per cent fall year-on-year, the European Union statistics office Eurostat said today.
Economists polled by Reuters had expected a 1.3 per cent quarterly drop after 0.2 per cent contractions in the second and third quarters, and a 1.1 per cent year-on-year decline.
Eurostat said that in the whole of 2008, the euro zone economy grew by 0.7 per cent against 2007.
The GDP data, coupled with fast deceleration in consumer price growth, is likely to add to pressure on the European Central Bank to make a deep interest rate cut at its next meeting in March.
The zone's biggest economy, Germany, shrank 2.1 per cent quarterly in the fourth quarter, France fell 1.2 per cent and Italy produced 1.8 per cent less in goods and services than in the previous three months. Spain shrank by 1 per cent.
The quarterly economic decline in the euro zone was bigger than in the United States, where the economy contracted 1 per cent quarter-on-quarter in the last three months of 2008.
Reuters