The eurozone economy ended 2009 with minimal growth, recording an estimated quarterly rate of 0.1 per cent of gross domestic product (GDP) and undercutting analysts' expectations, the European Union's statistical arm, dpa quoted Eurostat as reporting today. Analysts had predicted a quarter-on-quarter growth rate of 0.4 per cent in the eurozone, the same figure as it recorded in the third quarter of the year. The Eurostat flash estimate is "clearly below market expectations. It shows that indeed we still have a lot to do in terms of efforts for recovery and in terms of economic stimulus," a spokesman for the EU's economic and monetary affairs commissioner, Olli Rehn, said. At the same time, he stressed that "this is only the figure for one quarter, it has to be seen in the full picture" of recovery from the deepest recession in EU history, he said. The poor showing in the final three months of the year means that the eurozone economy shrank by a full 4 per cent year-on-year in 2009, Eurostat reported. The combined economy of all 27 EU members also grew by just 0.1 per cent in the last quarter of 2009, giving a total annual contraction of 4.1 per cent of GDP. The weaker-than-expected growth figures came just as European leaders were hoping that the bloc had begun to consolidate the tentative return to growth that it recorded in the third quarter of last year. After quarterly falls of 2.5 per cent in the first quarter of the year and 0.1 per cent in the second quarter, the eurozone returned to positive territory with a 0.4-per-cent growth rate in the third quarter. The EU as a whole recorded an almost identical trend. Eurostat's figures did show that the deepest recession to hit the EU in its half-century of history was beginning to bottom out. The eurozone economy in the first quarter of 2009 contracted by 5 per cent compared with the first quarter of 2008. By contrast, the last quarter of the year was just 2.1 per cent below the final-quarter figure of 2008. But the disappointing growth rate for the last quarter, well below analysts' expectations, is likely to unsettle markets. That is especially likely to be the case because of the poor showing recorded in Germany, the euro's economic motor. Quarterly growth flatlined in the last quarter of 2009, down from an encouraging 0.7 per cent in the third quarter. Italy, the eurozone's third largest economy, fell back into recession, its quarterly figure falling from 0.6 per cent of growth in the third quarter to a 0.2-per-cent contraction in the fourth. Analysts say that Italy is facing a further erosion of its international competitiveness in the wake of last year's dramatic contraction in economic growth. France, however, recorded a growth rate of 0.6 per cent over the previous quarter, the third successive three-month period of positive growth. Markets are deeply concerned about the eurozone's health, with Greece, Spain and Portugal all battling to clean up their state finances in a bid to wind back ballooning deficits and spiralling debts. Concerns that the financial crisis which has engulfed Athens could spread to other parts of the eurozone have already undercut the euro's performance on foreign exchange markets. In the last quarter of 2009, the Greek economy contracted by a quarterly rate of 0.8 per cent. Spain's economy shrank by 0.1 per cent, while Portugal stagnated. Also overhanging the eurozone in the coming months is the threat that the region's swelling job queues could hit private consumption which in turn might slow the pace of economic growth this year. Eurozone unemployment edged up to 10 per cent in December for the first time since the single currency was launched more than a decade ago, official data released last month showed. The International Monetary Fund said last month it expects the eurozone to grow by a moderate 1 per cent in 2010. This was up from a previous forecast of just 0.3 per cent.
