EU: Deeper Recession Forecast
Econintersect: The European Union Commission has issued it's winter economic forecast. The recession is likely to see the 17-country Eurozone GDP shrink another 0.3% in the first half of 2013. This contrasts to the forecast of 0.1% gain for the same time period just three months ago. The sharply lower forecast comes after the Eurozone saw a steep fourth quarter decline in GDP (-0.6%). The new forecast would put the Eurozone in a 0.9% GDP hole compared to third quarter of 2012 and more than 1% lower compared to third quarter 2011. The fourth quarter of 2013 was forecast to see a rebound with GDP growth of 0.7%. This would be a dramatic move as shown in a graph below.
The recovery is expected to continue in 2014 with a GDP expansion for the year of 1.4%.