The European Central Bank (ECB) has revised down its eurozone growth forecasts for this year and next as "economic weakness extends into 2013," BBC News reported.

ECB President Mario Draghi said the bank expected the bloc's economy to shrink by about 0.5% this year, before recovering later in 2013. He said weak consumer and investor sentiment was weighing on growth.

Earlier, the ECB held the benchmark eurozone interest rate at the record low of 0.75%, as had been expected.

Mr Draghi said rates had been left unchanged due to higher energy prices, rising taxes and the fact inflation fell from 2.5% to 2.2% last month. Interest rates are the main tool used by central banks to influence demand and therefore prices in the economy.

Mr Draghi said the bank expected inflation to fall below 2% next year. The target rate is below but close to 2%.

The eurozone is back in recession as austerity measures designed to reduce debt levels continue to undermine demand and confidence.

The economy of the 17-member bloc contracted by 0.1% between July and September, after shrinking 0.2% in the previous three months.

Meanwhile, the unemployment rate is at a record high of 11.7%.