The euro-area economy will shrink more than previously expected in 2013 as part of a two-year slump that has pushed up unemployment to a record, the European Commission said in new forecasts today.

Gross domestic product in the 17-nation region will fall 0.4 percent this year, compared with a February prediction of a 0.3 percent, the Brussels-based commission said today. This follows a 0.6 percent contraction in 2012 and shows the region headed for its first ever back-to-back years of falling output.

France, now projected to shrink 0.1 percent instead of growing by the same amount, joined seven other euro-area economies expected to contract this year. Growth across the currency bloc will return too slowly to reduce unemployment, as the euro area remains dependent on exports to offset the impact of the sovereign debt crisis and banking woes, the EU said.