"European Central Bank President
Mario Draghi said Thursday the euro zone is heading for a “mild
recession,” the first ECB official to use the R-word. He appeared to have gotten
the recession part right. But mild? That might be a bit too optimistic.
J.P.Morgan was among the first European banks to forecast a euro zone recession, meaning two-straight quarter of economic contraction, back in September. It was supposed to be a modest one, with GDP falling just 0.8% from its peak.
It now looks like things will get even worse. “We now believe that the
recession will be deeper and longer lasting, and we are making forecast changes
to show a peak to trough move in the level of GDP of just over 1%, with the
recession lasting through the third quarter of next year. The risks around this
forecast are for a deeper and even longer lasting contraction,” the bank said in
its latest research note.
The outlook is particularly grim along Europe’s struggling periphery. Ireland will stagnate next year, J.P. Morgan estimates, making it the economic champion of the periphery by default. Greece will contract 6.6%, Portugal by 3.9%, Spain by 1.1% and Italy by 1.5%, according to the bank’s revised estimates...."
at http://blogs.wsj.com/economics/2011/11/04/economists-forecast-longer-deeper-euro-zone-recession/?mod=WSJBlog
J.P.Morgan was among the first European banks to forecast a euro zone recession, meaning two-straight quarter of economic contraction, back in September. It was supposed to be a modest one, with GDP falling just 0.8% from its peak.
The outlook is particularly grim along Europe’s struggling periphery. Ireland will stagnate next year, J.P. Morgan estimates, making it the economic champion of the periphery by default. Greece will contract 6.6%, Portugal by 3.9%, Spain by 1.1% and Italy by 1.5%, according to the bank’s revised estimates...."
at http://blogs.wsj.com/economics/2011/11/04/economists-forecast-longer-deeper-euro-zone-recession/?mod=WSJBlog
