AFP - The economy of crisis-hit Greece shrank by 2.5 percent, slightly better than an earlier estimate, in the last three months of 2009 compared to output in the fourth quarter of 2008, official data showed on Friday.

The 12-month figure figure was a slight improvement on the agency's previous forecast of a 2.6-percent contraction in the fourth quarter of 2009.

On a quarterly basis, the country's gross domestic product was down 0.8 percent in the last quarter of 2009 compared to output in the third quarter, the Esye national statistics institute said.

The figures came as the Socialist government seeks to implement a draconian austerity budget aimed at slashing a runaway public deficit and debt that have shaken the eurozone.

The measures have led to protests including a second general strike on Thursday which brought thousands of people to the streets and was marked by clashes between police and hooded youths.

In October, the newly elected government revealed a hidden recession, blaming the previous Conservative administration for misreporting data.

The announcement marked the beginning of a crisis on the Greek government debt market which has since become a full-blown crisis for Greece and is posing severe strains within the eurozone.

The country's economy had slumped by one percent in the first quarter of 2009, 1.9 percent in the second and 2.5 percent in the third.

The government said last October that it expected a contraction of 1.5 percent this year.

But Capital Economics, an independent macroeconomic research consultancy, said "worse may be to come" for Greece and lowered its own forecast for the Greek economy to a contraction of 3.0 percent from a fall of 2.0 percent.

"For now, at least, Greece has persuaded the European Commission (EC) that it can meet its ambitious fiscal target for 2010. But the Greek crisis is far from over," Capital Economics said in a report.

"Indeed, with the economy set to contract sharply this year, additional fiscal measures may be required for Greece to meet its budget goal," it said.

Separately, the statistics office said the unemployment rate reached 10.2 percent in December compared to 8.9 percent the same month in 2008. Unemployment was higher in November at 10.6 percent.

Industrial production fell by 2.5 percent in January compared output in the same month in 2009 after a decline of 7.6 percent in December, the office said.