RTTNews - Eurostat confirmed the slight economic contraction in the euro zone region during the second quarter as rising household spending and government expenditure supported GDP. Meanwhile, the annual rate of decline was revised.

The Eurozone economy contracted 0.1% sequentially in the second quarter, following a record 2.5% fall in the first quarter, Eurostat reported. The statistical office thus confirmed the flash estimate released on August 13. The gross domestic product continued the stretch of fall that began in the second quarter of 2008.

But the annual decline in GDP was revised to 4.7% from a 4.6%. In the first quarter, GDP had slipped 4.9%.

Household final consumption expenditure climbed 0.2% quarter-on-quarter, while government spending rose 0.4%. Meanwhile, investment dropped 1.3%. Exports and imports fell at a slower pace of 1.1% and 2.8%, respectively. In the first quarter, exports had plunged 8.8%.

The EU27 economy shrank 0.2% in the second quarter compared to first quarter, revised from the initially estimated 0.3% decline. At the same time, the statistical office confirmed the annual GDP decline for the second quarter at 4.8%.

Eurozone's contraction was not as severe as in the U.S. The U.S. GDP dropped 1% sequentially, while Japan reported a quarterly 0.9% growth.

In a separate report, the Luxembourg-based Eurostat said Eurozone industrial producer prices dropped 8.5% year-over-year in July, slower than the 6.5% decline seen in the previous month. On a monthly basis, producer prices decreased 0.8% in July.

In EU27, producer prices on the domestic market were down 8.4% year-on-year versus June's 6.3% drop. From June, producer prices dropped 1%.

Among member states for which data are available, the largest annual falls in the total index were observed in the Netherlands, Denmark, Greece, Belgium and Finland. Only Malta reported increase in July.

Jean-Claude Juncker, head of the Euro Group of finance ministers said before they joined in Brussels that the worst is over, for the time being. But the time has not come to withdraw the stimulus measures.

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