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| Eurozone economy to shrink in 2013, says Commission | Eurozone economy to shrink in 2013, says Commission |
| (35 minutes later) | |
| The European Commission says the eurozone economy will shrink in 2013, after previously predicting that it would grow slightly. | The European Commission says the eurozone economy will shrink in 2013, after previously predicting that it would grow slightly. |
| Delivering its winter forecast, vice-president Olli Rehn said the 17 economies in the eurozone would collectively shrink by 0.3% this year. | Delivering its winter forecast, vice-president Olli Rehn said the 17 economies in the eurozone would collectively shrink by 0.3% this year. |
| The Commission had previously predicted overall GDP growth of 0.1%. | The Commission had previously predicted overall GDP growth of 0.1%. |
| But it is also predicting that the eurozone will see 0.7% growth in the fourth quarter. | But it is also predicting that the eurozone will see 0.7% growth in the fourth quarter. |
| The Commission is concerned about a "surprise" fall in Portugal's economy, which fell 3.2% in 2012 and is forecast to contract by another 1.9% in 2013. | |
| Most economic forecasters have been revising down their European growth estimates, after the global economic recovery showed signs of faltering in the final quarter of 2012. | Most economic forecasters have been revising down their European growth estimates, after the global economic recovery showed signs of faltering in the final quarter of 2012. |
| For example, in January the International Monetary Fund (IMF) said it expected the eurozone to fall into "mild recession" in 2013, having previously predicted growth. | For example, in January the International Monetary Fund (IMF) said it expected the eurozone to fall into "mild recession" in 2013, having previously predicted growth. |
| It also predicted that the UK would grow 1% in 2013, compared with the 1.1% previously forecast. | It also predicted that the UK would grow 1% in 2013, compared with the 1.1% previously forecast. |
| The World Bank also revised down its global growth forecasts earlier in January. | The World Bank also revised down its global growth forecasts earlier in January. |
| But European Central Bank (ECB) president Mario Draghi believes the eurozone will begin recovering in the second half of this year. | But European Central Bank (ECB) president Mario Draghi believes the eurozone will begin recovering in the second half of this year. |
| And this week, Germany's Bundesbank said Europe's biggest economy would avoid recession and return to growth in the first quarter of 2013, after shrinking 0.6% in the last three months of 2012. | And this week, Germany's Bundesbank said Europe's biggest economy would avoid recession and return to growth in the first quarter of 2013, after shrinking 0.6% in the last three months of 2012. |
| It expects Germany to continue growing throughout 2013. | It expects Germany to continue growing throughout 2013. |