Brussels: The economy of the 15 nations sharing the euro entered its first official recession in the third quarter, EU data confirmed in a second estimate on Thursday.

Facing the worst financial crisis in generations, the bloc's combined economy shrank by 0.2 per cent in the third quarter after contracting by the same amount in the second quarter, the Eurostat data agency said.

The slump marks the first recession, which economists usually define as two quarters running of contraction, that the bloc has suffered since it was formed in 1999.

The 27-nation European Union escaped recession by a narrow margin with the economy shrinking 0.2 per cent in the third quarter and flat-lining in the second quarter.

On a 12-month basis, eurozone growth slowed in the third quarter to 0.6 per cent from 1.4 per cent in the previous quarter while EU growth fell to 0.8 per cent from 1.7

The eurozone slump was driven by a 0.6-per cent fall in business investment while household spending stalled, and net trade was negative with exports showing only meagre growth, according to Eurostat s data.

However, Jennifer McKeown of Capital Economics took heart at the eurozone data, which she considered to be not so bad as they might have been.

"There are still reasons to hope that the downturn in the eurozone will be shorter-lived than those elsewhere," she said, although she also forecast the bloc s economy would shrink by 1.0 per cent in 2009.

Source : PTI