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EUREN group forecasts: Growth will continue to be moderate in 2012 in Europe

EUREN Winter Forecast 2012 - N.1/2012

17/02/2012

Réseau Euren

According to the Euren Group , economic situation in the Euro area is currently feeble and negative effects of the restrictive factors of the last months of 2011 will continue to work in the first quarters of 2012. More than ever, Euro area is divided in at least two groups.

According to the Euren Group , the economic situation in the Euro area is currently feeble.This gloomy picture will hold in the first part of 2012. The huge consolidation efforts will affect public and private consumption in many countries.

Only in the second half of 2013 the upswing in the Euro area will be strong enough to allow some minor reduction in unemployment. The demand of firms is expected to be ex-tremely weak, even if in some countries the investment cycle is still steady. The reduction in domestic demand, at least for 212 will be balanced by the external demand.This is especially true for peripheral countries.

More than in the recent past Euren group is observing the split of Euro area into at least two groups: The “core” countries (among which Germany or Austria), which recorded high growth rates and will in 2012 observe, in the worst case, a slowdown of expansion and the peripheral countries (as Italy or Spain), which are lagging, have competitiveness problems to solve and will very likely experience a recession.