BRUSSELS, Aug 14 - The euro zone economy is set to grow between zero and 0.4 percent in the third quarter of this year, accelerating to between 0.2 and 0.6 percent in the final three months, the European Commission forecast on Thursday. The third quarter figures are unchanged from last month's forecasts, while those for the fourth quarter are in line with Commission expectations that euro zone growth will start to pick up pace later this year and in 2004. "The acceleration in the fourth quarter would be due to domestic factors, as suggested by the improvement in retail confidence, as well as external factors, as indicated by the rise in the U.S. Purchasing Managers' Index for manufacturing," the EU executive said in a statement. The forecast, based on a European Commission model of various economic indicators, was released just after Germany confirmed that it fell into recession in the second quarter of the year. Italy is in the same position. Eurostat second quarter data for the whole of the euro zone, released at the same time as the Commission's forecasts, saw stagnation in the second three months of the year rather than recession, with gross domestic product in the bloc unchanged compared with the first quarter. The Commission's full year forecast for 2003 was recently revised down to growth of just 0.7 percent, before rising in 2004. ((Reporting by Patrick Lannin; patrick.lannin@.com; editing by Stephen Nisbet; messaging: For related news, double click on one of the following codes: [M] [T] [E] [D] [UKI] [FN] [N] [BL] [SW] [NW] [P] [DA] [OE] [IRL] [GNN] [ESL] [RNP] [EMK] [EU] [WEU] [ECI] [EUROPE] [MCE] [GVD] [DBT] [EUR] [FRX] [ECB] [NEWS] [DE] [IT] [LEN] [RTRS] [FR] Thursday, 14 August 2003 10:00:02 RTRS [nBRU000874]