EU predicts recession to continue this year, with jobless rate at record highs

BRUSSELS (AP) - The European Union is predicting that the recession in the 17 countries that use the euro will continue through the year, with unemployment remaining at record levels.

In Friday's spring economic forecast, the EU said gross domestic product (GDP) in the euro zone would shrink by 0.4 per cent this year, better than last year's 0.6 per cent.

Some countries, however, will fare worse than others. In crisis-hit Cyprus, GDP is set fall by 8.7 per cent this year.

Unemployment across the euro zone is expected to hit an average of 12.2 per cent, up from 11.4 per cent last year. In both Greece and Spain, it is expected to peak at 27 per cent.

EU Commissioner Olli Rehn said "in view of the protracted recession, we must do whatever it takes to overcome the unemployment crisis".