BRUSSELS (Kyodo) -- The European Commission on Wednesday revised downward its eurozone economic growth forecast for 2008 to 1.3 percent, down 0.4 percentage point from a previous forecast issued in April.
The European Union's executive body announced the revised forecast for the 15-member eurozone due to a sharp decline in private consumption amid the global financial turmoil stemming from the U.S. subprime mortgage crisis and rising inflation led by crude oil prices.
The commission also cut its growth estimate for the entire 27-nation bloc to 1.4 percent from 2 percent.
The latest forecast predicts inflation will average around 3.6 percent in the eurozone in 2008, up 0.5 point from the previous forecast, and 3.8 percent in the entire bloc, up 0.2 point.
The EU's statistics office said earlier that the eurozone economy contracted 0.2 percent in real terms in the April-June period from the previous quarter, marking the first decline since the launch of the single European currency in 1999.
The economy is not expected to grow in the July-September period and the poor performance of the eurozone suggests that the region is actually on the brink of recession, analysts said.