Effigies of Spain's Prime Minister Rajoy and German Chancellor Merkel burn during the finale of the Fallas festival in Valencia
Effigies of Spain's Prime Minister Mariano Rajoy (L) and German Chancellor Angela Merkel (R) burn during the finale of the Fallas festival earlier in March. according to reports, the Spanish people are quickly running out of patience towards the government's austerity plans. Reuters

The economic confidence in the eurozone fell more-than-expected in April, showing evidence of region's economic recovery in the early part of this year is temporary and raising concerns that the economy is heading towards deepening recession.

The Index showing the economic sentiment in the 17-nation eurozone dropped by 1.6 points to 92.8 in April from 94.5 in the previous month, the European Commission data showed on Thursday. The April's level of the index is the lowest since December 2009.

"This is a strong message. Signs of bottoming out observed between December and March are over. As is the hope that spending would recover once sovereign tensions ease, helped by the success of the European Central Bank's (ECB) Long-term refinancing operations (LTRO). Thus the aggregate picture points to a deepening of the recession in the euro area," said a note from Societe Generale Cross Asset Research.

The euroarea had started to post better data after the ECB announced its first LTRO in December, but the recent data has been showing evidence of fading impact of the central bank's refinancing operations.

The purchasing managers' index (PMI) in eurozone decreased sharply to 46 points in April from 47.7 in the previous month, recording its second consecutive decline and also the lowest level since June 2009, the Markit Economics data showed on Monday.

The central bank's LTRO was aimed at avoiding a credit crunch in the eurozone, as the sovereign debt crisis led to funding stress in the region's banking system. The ECB's had announced another LTRO in February to further ease liquidity shortage in the system.

"The risk is that the 2012 recession does not prove only mild (as we and the ECB expect) and that the anaemic recovery supposed to begin in H2 12 fails," said the note.

Besides, faltering economic growth left the unemployment rate falling in the euro zone, increasing by 0.1 percent to 10.8 percent in February, the highest level in 14 years, according to Eurostat data.

Unemployment European Central Bank