Eurozone economy shrinks again

The Eurozone economy contracted by more than expected in the first three months of the year, according to data released today, confirming that the region is in a recession.

Eurozone GDP fell by 0.3 per cent in the first quarter of the year compared to the final quarter of 2012. Analysts had expected a fall of 0.2 per cent. This follows a contraction of 0.6 per cent in the previous quarter. Two consecutive quarters of GDP contraction indicates a recession.

The Euro fell against the dollar on the news, while stock markets remained high.

In the EU27, EU28 and EU15, meanwhile, output contracted, but not as drastically, by 0.1 per cent in all. UK GDP increased by 0.3 per cent in the first three months of the year, following a 0.3 per cent fall in the previous quarter.

The biggest quarter-on-quarter GDP increases in Europe came from Norway (4.6 per cent), Latvia (1.4 per cent) and Lithuania (1.3 per cent), while the biggest falls came from Luxembourg (1.6 per cent), Cyprus (1.4 per cent) and the Czech Republic (1.4 per cent).