(RTTNews) - Strengthening expectations of a rate cut from the European Central Bank in March, Eurozone industrial production for December fell at record pace. At the same time, the central bank’s professional forecasters downwardly revised their gross domestic product outlook for 2009.

Thursday, the Eurostat said the industrial production dropped 2.6% month-on-month in December, after falling a revised 2.2% in November. The decline was slightly bigger than the expected fall of 2.5%, while the December slump was revised from the 1.6% initially reported.

Compared to December 2007, output tumbled 12%, severe than the expected fall of 9.5%. Meanwhile, the statistical office revised November’s decline to 8.4% from 7.7%.

Both monthly and year-on-year declines logged in December were the fastest since records started in 1990.

On a monthly basis, production of energy rose 1.1%, while non-durable consumer goods fell 0.9%. Production of capital goods decreased 2.5% and that of durable consumer goods dropped 2.8%. Intermediate goods output declined 5.7%.

Among the member states for which data were available, industrial production fell in nineteen and rose only in Lithuania. The most significant falls were registered in Slovakia, Ireland, Romania and Germany.

In EU27, industrial production slid 2.3% month-on-month and 11.5% from the previous year.

Elsewhere on Thursday, the ECB said in its monthly bulletin that the euro area is undergoing an extended period of significant economic downturn at a time when inflationary pressures are diminishing.

The bulletin showed that the respondents of ECB’s Survey of Professional Forecasters, or SPF, revised down their GDP and inflation outlook for the euro area. They now expect the gross domestic product, or GDP, to fall 1.7% in 2009. Respondents also revised their growth expectations for 2010 downwards substantially, by 0.8 percentage point to 0.6%.

According to the central bank, SPF respondents have revised the growth forecast for the period 2009-2010 down by a cumulative 4 percentage points since July 2008.

The ECB bulletin also showed that the outlook for the economy remains surrounded by an exceptionally high degree of uncertainty. The central bank added that the quarter-on-quarter real GDP growth in the final three months of 2008 would be very negative.

On February 5, the ECB kept its key interest rate unchanged at 2% after cutting the rate since early October.

SPF participants see inflation at 0.9% for 2009 and at 1.6% for 2010. The ECB aims to keep inflation below, but close to 2% over the medium term. In January, annual HICP inflation fell to 1.1% from 1.6% in December 2008.

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