The euro zone's economy slowed in the third quarter, sending a worrying signal to other global economies that demand from one of their biggest trading partners could fall back.

The annual gross domestic product of the 17-country group grew by just 0.1 percent in the third quarter of 2013, marking a slowdown from an expansion of 0.3 percent in the second quarter.

The latest figures from Europe's statistics agency Eurostat showed that growth in the 17-nation bloc had contracted 0.4 percent from this time last year. Analysts polled by Reuters had expected growth of 0.2 percent in the third quarter.

The latest data signals that the euro zone could be sliding back towards recession after it had pulled out of an 18-month stretch of negative growth -- and the longest contraction in continental Europe in over 40 years -- in the second quarter, with gross domestic product expanding by 0.3 percent from the first three months of the year.

"The bleak third-quarter GDP estimate shows just how fragile and hesitant the euro zone's recovery is - so much so that it's questionable whether current economic conditions even qualify as a recovery," Nicholas Spiro, head of Spiro Sovereign Strategy, told CNBC on Thursday.

"The deceleration is, psychologically speaking, a major setback for the euro zone."

The euro fell to $1.34365 versus the dollar after the data was released, from $1.3447 beforehand.



Earlier on Thursday, data showed that the euro zone's largest economy Germany expanded 0.3 percent in the third quarter - and the country's statistics office delivered a broadside to those in Brussels and Washington who criticized its budget surplus earlier this week.



Its near-neighbor France, reported disappointing GDP figures, also on Thursday, as concerns about reforms to its economy grow. In Italy, meanwhile - the third largest economy in the euro zone after France -- the economy contracted by 0.1 percent quarter on quarter, marking two and a quarter years of recession for the country.

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The data not only augurs more struggles ahead for the single currency area but could impact growth in the U.S., China and U.K, the euro zone's three largest trading partners, according to the European Central Bank (ECB).