Eurozone economy shrinks more than expected in second quarter

THE Eurozone economy shrank by slightly more than expected in the second quarter of 2009, official data revealed yesterday, but the 0.2 per cent contraction in the single currency bloc indicated the economy was nonetheless close to stabilisation.<br /><br />Germany and France, which both recorded 0.3 per cent quarter-on-quarter growth in the three months to June, lifted the overall performance of the Eurozone. The laggards were Spain and the Netherlands, which both saw their economies shrink by 1.1 per cent quarter-on-quarter.<br /><br />Government spending, lifted by fiscal stimulus measures, and significantly positive net trade, boosted the GDP figure, but a further sharp drop in Eurozone investment of 1.5 per cent quarter-on-quarter still concerned analysts.