The European Central Bank (ECB) said Thursday the recession in the EU member states would be twice as bad as it projected.
According to a survey published yesterday by the ECB, based on interviews with more than 50 forecasting experts from across the EU, the EU's output will contract by 3.4%. It will be twice as bad as it previously predicts by 1.7% in February.
The EU's economy suffered its sharpest slump on record in the first quarter of 2009 as the global financial crisis led to a slump in industrial output and retail sales.
Gross domestic product in the 16-nation euro area shrank by 2.5% between January and March, compared with the fourth quarter of 2008, and by 4.6% compared with the first quarter of last year. it is the biggest contraction since records began in 1995, the European Union's statistics agency said Friday.
The figures were even worse than economists had expected and confirmed that the EU's recession grew more severe in early 2009 and the region's economy contracted by 1.6% in the fourth quarter of 2008 from the previous quarter.
Almost all of mainland Europe's major economies suffered declines in GDP during the first quarter. German GDP, the Europe's biggest economy, contracted by 3.8% from the fourth quarter, the worst performance since German quarterly records began in 1970.
In France, GDP shrank by 1.2% on the quarter in the first three months of the year. In Italy, GDP fell by 2.4% on the quarter and by 5.9% from a year earlier, the worst year-on-year performance since Italy's statistics agency began publishing the measure in 1980.
And in Spanish, according to figures published on Thursday, its GDP dropped 1.8% in the first quarter.
The finance minister of Sweden, Anders Borg, who will take over the six-month rotating presidency of the EU from July said Thursday at the Brussels economic forum that the EU member states might need to expand more fiscal stimulus spending.