11 May, 2012

Eurozone economy to shrink

Latest reports suggest the eurozone economy is forecast to shrink this year as its debt crisis continues to bite.  The prediction of a 0.3{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} contraction in 2012 in the economies of the 17 countries that use the euro.

European Commissioner for Economic and Monetary Affairs Olli Rehn said “a recovery is in sight” for the eurozone.  For all 27 countries in the EU, the Commission is predicting zero growth for 2012, with 1.3{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} growth next year.

Among the individual member states, the only one predicted to see an economic contraction in 2013 is Spain, which is forecast to decline by 0.3{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e}.

The Commission predicts Spanish unemployment will continue to be the highest in the EU, with the jobless rate hitting 24.4{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} this year and 25.1{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} in 2013.  The unemployment rate in the eurozone is forecast to be 11{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} this year and in 2013, and 10.3{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} in the EU for both years.

Credit: BBC/Reuters/ADP

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