WORLD> Europe
Eurozone economy decreases by 0.2 percent in Q2
(Xinhua)
Updated: 2008-08-15 07:44

BRUSSELS -- Eurozone economy decreased by 0.2 percent in the second quarter, compared with the previous three months, the European Union (EU)'s statistics bureau Eurostat estimated Thursday.

It was for the first time that the economy of the 15-nation bloc sharing the same currency registered quarterly contraction since data collection started for the euro zone in 1995, raising fears about possible recession.

Analysts said the sharp decline was partly an adjustment to an out-of-expectation performance in the first quarter, when the eurozone economy grew by 0.7 percent quarter on quarter.

Compared with the same quarter of the previous year, the eurozone economy grew by 1.5 percent, also down from 2.1 percent in the first three months of this year.

Among large members in the euro zone, Germany, France and Italy all reported quarterly drop in the second quarter, decreasing by 0. 5 percent, 0.3 percent and 0.3 percent respectively.

European Commission spokeswoman Amelia Torres downplayed the possibility that the eurozone economy was on the verge of recession, saying it would be "exaggerated to use that word."

Technically, recession means two consecutive quarters of negative economic growth.

But Torres acknowledged the figure "confirmed that the risks are on the downside for growth."

Clouds were clearly gathering on the eurozone economy as record- high inflation, pushed up by rising oil and food prices, was dampening spending and a strong euro was hurting exports, analysts said.

In the 27-nation EU, economy shrank by 0.1 percent in the second quarter against the previous three months. It grew by 0.7 percent in the first quarter. Year on year, the EU economy increased by 1.7 percent, down from 2.3 percent in the first quarter.