The eurozone economy contracted a record 2.5 per cent in the first quarter and 4.8 per cent over 12 months as the recession bit in Europe,official data showed on Wednesday. While the quarterly record low confirmed figures released last month,notably due to falls in exports and investments,the 12-month rate of economic contraction was bigger than the original estimate of 4.6 per cent. Both cases show that the downturn is the sharpest for the 16-nation eurozone since records began in 1995,the Eurostat statistics agency said. The picture was similar for the 27-nation European Union as a whole,which saw a quarterly decline in gross domestic product of 2.4 per cent and contraction over 12 months of 4.5 per cent. The first quarter GDP figures are a reminder that,although various surveys tentatively suggest that the eurozone economy may have already passed the absolute trough of this recession,this is anything but a V-shaped recovery, warned Daniele Antonucci,European Economist at London-based Capital Economics. Unsurprisingly,the breakdown revealed that net exports,investment and inventories were the main factors behind the 2.5 per cent quarterly contraction.. True,an improvement on these fronts is likely going forward,but we dont believe that this will pull the eurozone economy strongly out of recession while global demand remains weak, he added.
