Eurozone in slight recession says EU Economic Affairs Commissioner Rehn

The European Union's Economic Affairs Commissioner Olli Rehn says the eurozone is currently going through a mild recession and he expects activity in the euro area to contract in the first half of this year. 

Reuters/Yves Herman

But he added he was convinced that economic reforms under way in many European Union countries, although difficult for citizens, amounted to a solid base for lasting growth.

Eurozone GDP growth was also revised down to 1.4 per cent for 2011, according to a second estimate issued on Tuesday by the EU statistical office which had previously estimated 1.5 per cent.

In the fourth quarter of 2011, Eurostat said eurozone gross domestic product had contracted 0.3 per cent from output in the previous quarter, unchanged from its first estimate.

Third-quarter growth fell 0.1 per cent, said Eurostat which in earlier figures had announced a 0. 2 per cent increase.

In comparison with the last quarter 2010, seasonally adjusted GDP rose by 0.7 per cent in the 17-nation eurozone

The fourth quarter GDP slide raises the possibility of a second period of recession in three years in the euro area should growth also contract in the first quarter this year, as recession is defined by two successive quarters of contraction.

In comparison, US GDP rose 0.7 per cent in the fourth quarter and 1.7 per cent overall in 2011. In Japan, GDP fell 0.6 per cent in the fourth quarter and 0.9 per cent overall in 2011.