Eurozone edges closer to recession Graffiti in Athens reads: 'Snow or rain, the jobless are always hungry.' Photograph: Thanassis Stavrakis/AP Fears that the eurozone has slid back into recession have been cemented by news that falling government and consumer spending, a drop in exports and an industry slump were all behind an economic downturn at the end of last year. GDP in the single currency area fell 0.3% in the fourth quarter of 2011 in the first contraction since the eurozone left recession in 2009. Confirming its previous estimate, the European Union statistics office, Eurostat, reported falling activity across the board. As businesses and households alike battled rising unemployment, austerity measures and ongoing worries around the sovereign debt crisis, consumer spending was down 0.4%, exports fell 0.4%, government spending fell 0.2% and industry dropped 2%. Net trade helped stem the fall in overall GDP but that was merely because imports to the troubled currency zone tumbled 1.2%. Economists said the eurozone would now struggle to avoid recession, technically two consecutive quarters of contraction, as troubles in countries on the edge of the area, and Greece particularly, persisted. "It was confirmed that the eurozone stuck one foot back through the recession door in the fourth quarter of 2011," said Howard Archer, economist at IHS Global Insight. Unsurprisingly, the struggling southern periphery eurozone economies all saw contraction in the fourth quarter of 2011 as various combinations of tighter fiscal policy, high and rising unemployment, wage cuts, elevated debt levels and still elevated market interest rates resulting from the sovereign debt crisis took an increased toll. The drop in the eurozone compared with a 0.2% contraction in UK GDP in the fourth quarter. However, economists have recently scaled back forecasts that the UK could also suffer a technical recession after a series of more upbeat economic indicators since the start of the year.