Munich  - The economic slump in the euro zone has worsened, economists from three nations said Tuesday in a new study.

"Despite the deployment of government stimulus packages, the economic outlook remains gloomy," said the joint report by the IFO Institute of Germany, Insee of France and the ISAE economic research institute of Italy.

The group said the decline had become steeper since the start of this year and the euro zone was now in a serious recession.

They estimated the decline in the zone's gross domestic product in the first quarter at 1.9 per cent, greater than fourth quarter 2008's decline of 1.6 per cent, but suggested the fall would ease to 0.6 per cent in the second quarter and 0.2 per cent in the third.

Private consumption was set to decline, mainly because real disposable incomes were set to perceptibly contract, they warned.

The study added that investment which bumped sharply lower at the end of last year would keep declining, both because of continued strain in financial markets and because of the costs of running businesses at well below capacity.

Basing their prediction on a world oil price averaging 45 dollars a barrel and an exchange rate stabilizing at 1.35 dollars per euro, they forecast inflation rates at the end of June and September of minus 0.2 per cent.

But the three nations' economists said they did not anticipate any deflationary risk, since the "underlying" inflation rate was firmly positive. (dpa)