Europe recession deepened in Q1

By Brian Love, European Economics Correspondent

PARIS (Reuters) - Europe sank to what may have been the recession's low point in the first quarter of this year as tumbling German exports and investment plus further sharp drops in output elsewhere hastened the pace of a year-old contraction.

Official GDP estimates showed the period was the worst since records at European level began in 1995, though more up-to-date business surveys suggest the first global recession since World War Two may subsequently have passed its most severe.

"Although we are nowhere near the peak in unemployment, we can safely assume that the first quarter was the worst in terms of the pace of decline," said Martin van Vliet, an economist at ING bank.

"The latest ugly GDP figures should, however, mark the trough of the current 'Great Recession', said Alexander Koch, an economist at UniCredit bank.

GDP, or gross domestic product, fell 2.5 percent versus the last quarter of 2008, both at the level of the 16-nation euro currency zone and 27-member European Union bloc, according to the EU statistics office.

German's GDP fall of 3.8 percent, which was far steeper than forecast by economists, was the worst since calculations of that kind began in 1970, the country's statistics office said.

French GDP slipped heavily too if less dramatically, by 1.2 percent, the official data there showed, while Italian GDP fell 2.4 percent, the sharpest dip since 1980.

Economists had forecast a bad but less dramatic fall of 2.0 percent in euro zone GDP, after a drop of 1.6 percent in the previous quarter and the declines in several eastern European countries outside the euro zone were no less startling.