Fears the eurozone slipped deeper than expected into recession in the fourth quarter were cemented yesterday as the EU statistics agency confirmed its estimate that GDP fell 0.6pc in the final quarter.
The fall in the final three months of 2012 is the biggest quarter-on-quarter fall in a year of contraction, according to figures from European statistical agency Eurostat.
The worse-than-expected decline – the deepest since the first quarter of 2009 – was driven by GDP slumps in the bloc's major economies, including a shock 0.6pc contraction in Germany and a 0.3pc fall in French output in the fourth quarter.
Eurostat also confirmed its estimate that eurozone GDP fell 0.9pc year-on-year, to end the year in its second recession since 2009. It attributed the decline to a 0.4pc contraction in household expenditure across the bloc and falling exports, which dropped 0.9pc in the single-currency area.
It comes as a conference in Dublin today will hear that while net exports are the dominant driver of growth in the Irish economy, our share of world trade peaked 11 years ago.
Meanwhile in Italy, the third largest eurozone economy, fourth quarter GDP shrunk a more-than-expected 0.9pc.
Only two of the 17 eurozone economies grew in the last three months of 2012, Estonia and Slovakia.
Although political uncertainty in Italy is likely to further hit economic growth in the first quarter of 2013, economists hope the fourth quarter of 2012 marked a low point for the eurozone.
Howard Archer, chief European economist at IHS Global Insight, forecast that the economic slowdown would slow in 2013.
"Ongoing contraction in Spain and Italy looks set to weigh down on the eurozone's performance through 2013, while France also faces a difficult year. Overall, we expect eurozone GDP to edge down by 0.3pc in 2013," he said.
Meanwhile, a conference today, jointly hosted between the Economic and Social Research Institute (ESRI) and the European Commission, will hear that while net exports are the dominant driver of growth in the economy, our share of world trade peaked in 2002.
Adrian Devitt of Forfas, Ireland's policy advisory board for enterprise and science, will say that at a national level, Ireland's competitiveness has improved, but that further cost reductions are required.
"With a small domestic market, expansion into other markets is a prerequisite for growth. Within our exporting base, challenges remain to grow market share, to enhance the share of national exports from indigenously owned firms, to upgrade capabilities and to diversify exports," his presentation states.
He says it is crucial that Ireland continues to make progress in upgrading its human, ICT, and research, development and innovation capacity.
The conference, which will close with an address by Foreign Affairs and Trade Minister Eamon Gilmore, will also hear presentations from the European Commission, the Vienna-based Austrian Institute of Economic Research, and the ESRI.