Posted by: youngragingbull | May 3, 2013

EU slashes growth forecasts for 2013

As a result of deteriorating economic conditions, the European Commission on Friday cut its growth forecasts for the 17-nation euro area, saying it now expects GDP will shrink 0.4% this year, versus prior expectations for a drop of 0.3%.

Growth fell 0.6% in 2012, which would make for two years of back-to-back contraction for the region after this year.

In its latest forecast, the EU said external demand will be a main driver to help bring the region out of contraction, while domestic investment and consumption will be a driver for 2014 when growth is expected to rebound 1.6%.

But it said the labor market remains a serious concern, forecasting an 11.1% overall unemployment rate for the 17-nation region, and 12.2% in the eurozone.

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