FRANKFURT, Germany, May 2 (UPI) -- The European Central Bank lowered its overnight lending rate Thursday to 0.5 percent as the eurozone economy struggles to pull out of a recession.
The rate was last lowered in July 2012 from 1 percent to 0.75 percent. Thursday's move, to an historic low for the currency region's central bank, was made as economic output contracted for the fifth consecutive quarter in the final three months of 2012, ECB President Mario Draghi said at a news conference in Frankfurt, Germany.
The region's gross domestic product fell 0.6 percent in the fourth quarter of 2012, following a drop of 1 percent in the previous quarter.
In addition, "current data suggests more of the same. "Recent developments in short-term indicators, notably survey data, indicate that weak economic sentiment has extended into spring of this year," Draghi said in prepared remarks.
In March, Draghi said that the ECB projected economic growth in the second half of 2013, "subject to downside risks."
"Export growth should benefit from a recovery in global demand and our monetary policy stance should contribute to support domestic demand," he said in March.
But Draghi also said member nations in the eurozone -- the 17 countries that share the euro as currency -- continue to struggle with debt reduction.
The average government deficit declined from 4.2 percent of gross domestic product in 2011 to 3.7 percent in 2012, he said. But the average government debt -- the sum of all outstanding government deficits -- rose from 87.3 percent of GDP to 90.6 percent over the same period, Draghi said.
"In order to bring debt ratios back on a downward path, euro area countries should not unravel their efforts to reduce government budget deficits and continue, where needed, to take legislative action or otherwise promptly implement structural reforms ... to mutually reinforce fiscal sustainability and economic growth," he said.