Euro zone economic growth accelerated as expected in the first quarter against the previous three months, but the European Commission cut its second quarter growth forecast, data showed on Thursday. The European Union statistics agency Eurostat said the 12-nation euro zone's economy expanded by 0.5 percent quarter-on-quarter in the January-March period, up from 0.2 percent growth recorded in the last quarter of 2004. The quarterly growth was lead by a 1.0 percent increase in the biggest economy Germany while Italy recorded a 0.5 percent contraction of its gross domestic product, showing it was in recession after a 0.4 percent GDP fall in the fourth quarter. Year-on-year the euro zone's GDP grew 1.4 percent in the first quarter, down from 1.6 percent in the fourth quarter. After a raft of data showing a decline in business activity and sentiment in April, the European Commission cut its forecast for euro zone quarterly growth in the second quarter by 0.1 percentage point to a range of 0.2-0.6 percent. It forecast the same range for third quarter growth. The modest euro zone growth figures, where domestic demand is stifled by a high unemployment rate of 8.9 percent, contrast sharply with those of the United States, where GDP rose 0.8 percent in the first quarter and grew 3.6 percent year-on-year.