The euro zone's economy shrank more than expected in the second quarter because private demand and trade were lower than previously estimated, but it is still likely that it returned to growth in the third quarter.
The EU statistics office Eurostat said today that gross domestic product in the 16-country area fell by 0.2 per cent in the April-June period quarter-on-quarter and by 4.8 Per cent in annual terms.
This compared with the previously reported falls of 0.1 per cent and 4.7 per cent.
A plunge in inventories was slightly smaller than previously reported. The drop in stocks of finished goods took away 0.6 percentage point from the overall second-quarter result rather than the 0.7 percentage point reported previously.
Also the contribution from government spending was higher than previously reported at 0.2 percentage point, rather than just 0.1 percentage point, showing the positive effects of stimulus packages that have injected money into economies.
But this was more than offset by a downward revision of the positive contributions made by household demand and trade. Consumer demand was zero rather than a positive 0.1 percentage point and trade added only 0.5 percentage point, rather than 0.7 points as estimated earlier.
"Overall, this report is slightly negative but adds nothing to the big picture. The economy very likely returned to growth in Q3 and a rather moderate recovery is likely to follow in the coming quarters," said Nick Kounis, economist at Fortis Bank.
Eurostat data also showed the recession turned out to be deeper than previously estimated in the Netherlands and Austria, Eurostat said.
The data is likely to add to European Central Bank caution not to withdraw its monetary stimulus prematurely when the ECB meets to decide interest rates on Thursday.
Economists say they believe the ECB will keep rates at a record low 1 per cent until the third quarter of 2010 despite signs the euro zone may have returned to growth in the third quarter of 2009.