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BRUSSELS: The 17-nation eurozone continued stuck in recession for a sixth consecutive quarter in the first three months of 2013 but showed some signs, especially in powerhouse Germany, of stabilisation, official data showed on Wednesday.

The Eurostat statistics agency said the eurozone economy shrank 0.2 per cent compared with the last quarter of 2012 and contracted 1.1 per cent compared with a year earlier.

For the 27-member EU, the economy shrank 0.1 per cent and 0.7 per cent respectively, it is said.

Among the major economies, Germany edged up 0.1 per cent in the first quarter compared with the last quarter of 2012, with France down by 0.2 per cent, and Italy and Spain both off 0.5 per cent. Portugal shrank 0.4 per cent.

In EU countries not in the eurozone, Britain grew 0.3 per cent in the first quarter, while Romania grew 0.7 per cent.

A separate survey showed that eurozone business activity continued to deteriorate in May but at a slower pace.

The closely-watched Markit Eurozone Composite Purchasing Managers Index for May was unchanged from an initial reading at 47.7 points, hitting a three-month high and well up on April's 46.9 points.

However, this was still below the boom-bust threshold of 50 points.

On the positive side, Germany edged up to 50.2, a two-month high, while struggling Spain hit 47.2, its best performance in 23 months.

France was still deep in trouble at 44.6, although this was a five-month high, while Italy was unchanged at 46.6.

Chris Williamson, Markit chief economist said the report confirmed “that the eurozone remains gripped in the longest recession” since the introduction of the euro.

The economy is likely to have contracted 0.2 per cent in the second quarter, making for seventh consecutive run of negative figures, Williamson said.

While the downturn may have eased, the “reality is that the region lacks any growth drivers, making it difficult to believe that anything better than a mere stabilisation of economic activity remains unlikely for the foreseeable future,” he said.

IHS Global Insight's Howard Archer said the Markit survey showed that demand “remains constrained by restrictive fiscal policy” as governments grapple with the fallout from the debt crisis, tight credit and rising unemployment.

“Meanwhile, global growth is muted and stuttering, which is currently limiting the upside for eurozone exports,” Archer said.

Updated Jun 05, 2013 03:23pm

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