BRUSSELS &S212; The economy of the euro zone shrank more than expected in the second quarter of this year because private demand and trade were lower than previously estimated, data released Wednesday showed. But analysts said it was still likely that the region was already returning to growth.

The European Union statistics office Eurostat reported that gross domestic product in the 16-country euro area contracted 0.2 percent in the April-to-June period, compared with the previous quarter, and by 4.8 percent in annual terms.

This compared with the previously reported drops of 0.1 percent and 4.7 percent. Economists polled by Reuters had expected Eurostat to confirm its previous estimates.

But Howard Archer, an economist at Global Insight, said that what he termed the &S220;modest downward revision&S221; in figures for the second quarter &S220;does not materially change the picture.&S221;

&S220;It still indicates that the euro zone economy was close to stabilizing in the second quarter after a year of deep overall contraction, and it still seems likely that the region returned to growth in the third quarter, albeit modest,&S221; he said.

He forecast 0.3 percent growth in the just-concluded third quarter, compared with the second.

A plunge in inventories was slightly smaller than previously reported immediate payday loans online. The drop in stocks of finished goods took away 0.6 percentage point from the overall result in the second quarter, rather than the 0.7 percentage point reported previously.

Also the contribution from government spending was higher than previously reported, at 0.2 percentage point, rather than just 0.1 percentage point, showing the positive effects of stimulus packages that have injected money into economies.

But this was more than offset by a downward revision of the positive contributions made by household demand and trade. Consumer demand was zero rather than a positive 0.1 percentage point and trade added 0.5 percentage point, rather than 0.7 points as estimated earlier.

Eurostat data also showed the recession turned out to be deeper than previously estimated in the Netherlands and Austria.

The data is likely to add to European Central Bank caution not to withdraw its monetary stimulus prematurely when the E.C.B. meets to decide interest rates on Thursday.

Economists say they believe the E.C.B. will keep rates at a record low 1 percent until the third quarter of 2010.

Reuters

Euro-Zone G.D.P. Shrank More Than Expected in Quarter