LONDON, Dec 14 (Reuters) - The euro zone recession has deepened in the current quarter after the bloc's private sector contracted for the 11th straight month in December, a purchasing managers' index suggested on Friday.
While the index rose from November, it began the quarter with a reading last seen as the bloc emerged from the previous recession more than three years ago.
Markit's Flash Composite Purchasing Managers' Index, which polls around 5,000 businesses across the 17-nation bloc and is viewed as a reliable growth indicator, rose to a nine-month high of 47.3 this month, beating forecasts for a rise to 46.8.
"The official GDP data are lagging behind the PMIs so we strongly suspect that the official data will show an increasing downturn of the euro zone recession in the final quarter," said Chris Williamson, chief economist at data collator Markit.
"The data is consistent with GDP falling about 0.5 percent."
The euro zone economy contracted 0.2 percent in the second quarter and 0.1 percent in the third, meeting the technical definition of a recession.
A Reuters poll last week predicted a 0.3 percent contraction in the current period with no return to growth until the second quarter of next year.
Indeed, the PMI has been below the 50 mark that divides growth from contraction for all but one of the past 16 months.
A three-year-old debt crisis has wreaked havoc across the region, weighing on the global economy in turn, and threatened to tear the currency union apart.
But the euro zone agreed a deal on Thursday to provide nearly 50 billion euros in long-delayed aid to Athens, prompting Prime Minister Antonis Samaras to declare an end to talk of a Greek exit from the single currency.
It averts a catastrophic default and secures Greece's survival in the euro zone after months of doubt and political turmoil. Athens had repeatedly missed fiscal targets agreed with the EU and the International Monetary Fund, and stalled structural economic reforms.
Earlier data from Germany, Europe's largest economy, showed its private sector bounced back to growth for the first time in eight months in December.
In neighbouring France, however, while the downturn eased the PMI held below 50 for the 10th straight month.
"France is faring much worse than Germany. It is becoming more aligned with its southern neighbours of Spain and Italy," Williamson said.
The PMI for the euro zone's dominant service sector rose to 47.8 this month from 46.7, beating forecasts for a rise to 47.0.
However, some of that business was from firms running down backlogs of work. The sub-index nudged up to 45.1 from 44.8 but has been below 50 since July 2011.
The continued downturn came despite firms cutting prices for the ninth month. The euro zone composite output price index fell to 47.7 from last month's 48.2.
Firms were forced to reduce their prices to drum up business despite their costs rising - cutting into their margins.
"Particularly in the service sector, firms have been cutting rates charged pretty aggressively to win business and maintain existing customers, but the situation is less evident in manufacturing," Williamson said.
Manufacturers, who led the bloc out of the last recession, fared little better. The factory PMI crept up to 46.3 from 46.2, missing forecasts for a steeper rise to 46.6.
The output index for the sector held steady at November's 46.1.
But in a sign that the global economy might be improving, the rate of decline in new export orders from factories eased, with the sub-index at a nine-month high of 46.8.
"There are some rays of hope here. It is moving in the right direction so there are signs that the business cycle has reached a low point globally and picking up," Williamson said. (Editing by Hugh Lawson)
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.