Economic growth in the 12 nations of the eurozone fell for the first time in a decade, the latest official figures have showed.

However, the European Commission said a recovery may already be underway, a view backed up by the central bank's chief economist.

Eurozone growth fell 0.2% in the final three months of last year when measured against performance in July to September 2001, according to data from the European Union statistics office.

But growth was 0.6% stronger than the same period a year earlier - in line with expectations.

'Slowdown is over'

Furthermore, growth is set to rise in the first half of the year, according to forecasts drawn up by the European Commission.

They "confirm that the slowdown is over, but suggest that the recovery is moderate", the Commission said.

The Commission forecast gross domestic product (GDP) would improve by a maximum of 0.4% in the first quarter of this year, then put on up to 0.7% in the second quarter.

Hopes of a recovery

Otmar Issing, chief economist at the European Central Bank (ECB), said eurozone economic growth would recover in the second half of the year.

In an interview with a French newspaper, Mr Issing said the eurozone's growth target of between 2% and 2.5% in 2002 was "realistic".

For its part, the Commission said poor growth so far this year was due to shoppers not spending enough.

The Commission also pinned its hopes on an upturn in the United States economy.

"In the first quarter of this year, weak consumer spending, as captured by retail sales, has held back further acceleration, while in the second quarter acceleration is helped by recovery in the US", it said.

Germany remains weak

Trade figures from Germany on Tuesday showed Europe's biggest economy still mired in recession.

The country's trade surplus grew, but largely because imports fell, while exports also declined.

"The data [is] not good, showing that domestic data is still very weak," said Ulla Kochwasser, an economist at IBJ Deutschland.

Germany's imports from other EU countries dropped 11% in January to 22.1bn euros, while non-EU imports were down 15.3% to 18.1bn euros, official figures showed.

Total exports fell 2.8% to 50.3bn euros, compared to 3.6% in December.

French inflation down

Inflation figures from France - Europe's second biggest economy - seemed to support the Mr Issing's view that price rises would ease from February.

Falling prices for fresh fruit and vegetables helped steady the pace of inflation in February.

The consumer price index rose 0.2%, after a 0.5% jump in January, official statistics agency INSEE said.

French inflation was 2.3% on an annualised basis, compared to 2.4% at the end of January.