Euro-zone economy posts record plunge in first quarter

May.15.2009 Business news

LONDON (MarketWatch) - A deep recession took a turn for the worse in the first quarter of 2009, shrinking the euro-zone economy by a record amount as exports plunged and industrial output took a devastating hit, official data showed Friday. The 16-nation euro zone saw first-quarter gross domestic product shrink by 2.5% …

compared to the final quarter of 2008, the statistics agency Eurostat said in a preliminary estimate.
Compared to the same period a year ago, GDP dropped by 4.5%.

Economists had forecast a quarterly drop of 2.2% and an annual decline of 4.1%.

Individual country data released earlier Friday had pointed to a steeper-than-expected fall for the region.

The German economy contracted 3.8% during the first quarter for a year-on-year decline of 6.9%, the worst since records began in 1970, as exports tumbled in Europe’s largest economy.

Economists had been pegging a 3.4% quarterly contraction.

The French economy didn’t fare much better, contracting at a 1.2% quarterly and a 3.2% annual rate.

Italy’s economy shrank 2.4%, or 5.9% from a year earlier.

Figures earlier this week showed Spain’s economy fell 1.8% from the previous quarter.