Eurozone Recession Fears Loom As GDP Falls

Fears are looming of a eurozone recession as its GDP fell by 0.3% over the last quarter, Italy was thrown into a recession and Germany's economy shrunk.

The fall in economic growth for the entire eurozone is its first contraction since the second quarter of 2009, raising concerns the area may fall into a mild recession.

Germany, the eurozone's biggest economy, saw GDP drop 0.2% as exports slowed because of the on-going debt crisis in its European neighbours and their demand for German goods.

The figure is a a slowdown from upwardly revised 0.6% growth in the July to September period.

Troubled Italy saw its GDP fall by 0.7% in the last quarter of 2011, which means Italy has now been shrinking for six months.

The figure threw the country into a recession which is expected to last for much of this year.

The latest data underscores the difficulties facing the Italian prime minister Mario Monti's technocrat government as it grapples with a shrinking economy dragged down by austerity measures.

The Netherlands also saw a 0.7% fall in GDP, which meant it was thrown it into a recession too.

Meanwhile, France's economy grew by 0.2% from the previous three months as corporate investment picked up and domestic consumption remained solid.

The figure will come as a welcome boost to president Nicolas Sarkozy, who faces a national election in April, should he chose to run again.

Confidence in France was undermined in January when it lost its top-notch AAA credit rating.

For 2011 as a whole, the French economy grew by 1.7% and Germany's by 1.5%.